Gold­fields min­ers get big tick

Kalgoorlie Miner - - NEWS - Josh Chiat

Re­sources an­a­lysts are tak­ing an up­beat out­look on the for­tunes Gold­fields-fo­cused min­ers in the wake of a rally in gold prices.

In a note to clients this week RBC Cap­i­tal Mar­kets re­sources an­a­lyst Paul His­sey said a range of Aus­tralian gold min­ers stood to ben­e­fit from sen­ti­ment prices could rise fur­ther, with Aus­tralian gold eq­ui­ties ral­ly­ing from 15 to 20 per cent in re­cent weeks.

Mr His­sey said trade ten­sions, po­lit­i­cal un­cer­tainty and fall­ing stock mar­kets con­trib­uted to a re­cent rise in the US dol­lar gold prices, with a weak Aussie dol­lar al­ready giv­ing lo­cal pro­duc­ers an ad­van­tage.

He noted Kalgoorlie-fo­cused North­ern Star Re­sources and Sara­cen Min­eral Hold­ings were among the most likely of the larger gold min­ers to im­prove in the com­ing months on the back of “en­cour­ag­ing” ex­plo­ration re­sults.

Mean­while, Mr His­sey said smaller gold com­pa­nies like Mt Mor­gans owner Da­cian, Gruyere gold mine de­vel­oper Gold Road Re­sources and Ramelius Re­sources would also stand to ben­e­fit be­cause higher prices would al­low them to avoid cash flow con­cerns and in­vest in ex­plo­ration and growth.

Over­all, Mr His­sey said Aus­tralian gold stocks were fully val­ued but in a good po­si­tion to im­prove if prices re­main high.

“To those who de­cry that ‘gold is not do­ing its job any­more’ we would ar­gue that it is do­ing ex­actly what it’s sup­posed to do,” he said.

“Even more im­por­tantly, the healthy state of the Aus­tralian pro­duc­ers pro­vides (in our view) a com­fort­able place to in­vest as the stocks in this mar­ket typ­i­cally do not re­quire a higher price to make the busi­ness bet­ter.

“The re­cent rally merely pro­vides ad­di­tional mar­gin to al­ready very healthy busi­nesses.”

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