Reports from Citi earlier this year suggested that the firm believes higher gold prices are in store for investors. Market “jitters” could bring investors to put more money into safe-haven assets. Obviously, gold would be a potential way for investors to hedge risks to the downside. As all investors know, gold is the classic hedge against equity volatility and general fears about economic stability.
In the short-term, Citi increased its 6-12 month target on gold to $1,700 per ounce. In addition, it gave a 12-24 month outlook of $2,000/ounce.
Investment demand for gold continues to be strong. There could be more room for the mining stocks to rally since their profits are leveraged to gold prices.
Gold stocks has already started showing great momentum and will likely continue this week as well. Due to this impressive rally in the gold, it could be worthwhile for investors to have a look at Newmont Corporation (NYSE: NEM) and Delta Resources Limited (OTC: GOLHF) (TSXV: DLTA)
Newmont Corporation (NYSE: NEM) focus on key growth projects, disciplined capital allocation strategy and higher gold prices are some major factors driving the stock.
The company is expected to benefit from the progress of its key growth projects, including Tanami Expansion in Australia as well as Subika Underground and Ahafo mill expansion in Africa.
Newmont’s Africa operations witnessed 1.1 million ounces of attributable gold production in 2019 at an all-in sustaining cost of less than $800 per ounce. This was mainly driven by the successful completion of Ahafo’s expansion projects. The mine is expected to add annual gold production of 75,000-100,000 ounces per year from 2020 to 2024.
Notably, the company’s first-quarter attributable production in the North America and South America soared 364% and 27% year over year, respectively.
Newmont’s disciplined capital allocation strategy is likely to strengthen its investment-grade balance sheet along with enabling investment in high-return projects and returning excess cash to shareholders.
Delta Resources Limited (OTC: GOLHF) (TSXV: DLTA) is a Canadian mineral exploration company focused on growing shareholder value through the exploration of two very high-potential gold and base-metal projects in Canada.
- DELTA-1, located 50km west of Thunder Bay, Ontario where a 1000m drilling program was completed in Nov. 2019, testing the newly discovered Eureka Gold prospect. Results so far show very wide intercepts of low-grade gold in a km-scale alteration zone.
- DELTA-2, located 35km SE of the Chibougamau, Quebec, where preliminary due diligence and prospecting work discovered two new gold occurrences where grab samples returned up to 55,8 g/t Au and 11,45 g/t Au.
Delta also owns a 100% interest in the Bellechasse-Timmins gold deposit in SE Quebec, which contains a 43-101 gold resource of 171,000 oz @1.83 g/t gold (indicated) and an additional 95,000 oz @1.36 g/t gold (inferred). On July 3, 2020, Delta signed an agreement with Yorkton Ventures Inc for the sale of the Bellechasse-Timmins project for $1,7M payable over 15 months of signing.
The company recently announced that it was granted the necessary encroachment permit to drill-test its Trans Canada Gold target at the Delta-1 Property, 50 kilometres west of Thunder Bay, Ontario.
This initial permit, granted by the Ontario Ministry of Transportation (“MTO”), will allow Delta to drill up to 14 drill holes totalling 4,200 metres at any time between January and November 18, 2021. The drill holes will initially be testing the Trans Canada Gold Target over a minimum strike length of 700 metres underneath and south of the highway.
Since Delta acquired the Delta-1 property in October 2019, the Company has focussed its exploration efforts on the Eureka Gold occurrence area in the central-east portion of the property. This work includes Delta’s maiden drilling program in November 2019 (six drill holes totaling 1000 metres), a reconnaissance basal till survey during the summer of 2020 and a geological mapping and sampling program in October 2020. All exploration work to date provide a convergence of evidence that points to the Shebandowan Structural zone and a possible subsidiary structure that lie immediately adjacent or underneath the Trans Canada Highway.