Gold had a remarkable performance in the first half of 2020, increasing by around 25% from its low in March and significantly outperforming all other major asset classes.
David Rosenberg sees gold going to $3,000/oz on the back of slowing global economic growth, exacerbated by the onset of the coronavirus, and artificially low interest rates were pointing to “a very bullish case” for the precious metal and equities this year.
Rosenberg added that investors shouldn’t expect to see a significant recovery anytime soon. He said that they should position their long-term portfolio to reflect an environment of long-term stagflation and added that it is only a matter of time before prices push to record highs. He is bullish on gold as inflation keeps real rates in negative territory.
“Central banks are going to hold interest rates constant near zero. It tells me that real interest rates are going to go further and further into negative territory, and there is no better correlation between the gold price and real interest rates,” he said.
Last week, NQ Minerals Plc (OTC: NQMLF) announced that the Tasmanian Government has now formally transferred the Mining Lease ML 1767 P/M, that covers the Beaconsfield Gold Mine, to NQ’s 100% subsidiary Pieman Resources Pty Ltd.
The Beaconsfield Gold Mine has historic recorded production of c.1.8 million ounces of gold averaging c.15 grams per tonne (c.½ ounce per tonne). The Company plans to re-open the mine as soon as practicably possible.
On May 7, 2020, NQ also announced a new JORC (2012) compliant Mineral Resource Estimate of the lower section of the Beaconsfield Gold Mine of 1.454 million tonnes grading 10.3 grams per tonne (g/t) for 483,000 ounces of gold. Significant additional gold potential is still to be assessed in the upper section of the old Beaconsfield Mine workings, plus the orebody remains open at depth.
Earlier this month, the company achieved excellent production levels of metals concentrates for the Second Quarter ending June 30 2020 (“Q2”), despite the COVID-19 pandemic, from the Company’s flagship Hellyer Gold Mine (“Hellyer”) in Tasmania, Australia.
Hellyer’s lead concentrate production for Q2 totalled 8,762 tonnes and zinc concentrate production totalled 4,241 tonnes. In addition, NQ advises that a total of 1,223 ounces of gold and 229,947 ounces of silver were produced as payable precious metal credits in the lead and zinc concentrate streams for the Quarter. Refer to Table 1 for detailed analysis. During H1 2020, the Company generated an unaudited Revenue from Mining Operations of A$30m and an operating Gross Profit of A$12m.
Major plant upgrades and process optimisation plans were implemented at Hellyer in the last week of June 2020, which successfully increased plant throughput by 44% to a rate of over 1.3 million tonnes per annum (1.2Mtpa at 92% plant availability), compared to 2019’s full year plant production numbers.
Several upcoming catalysts could catapult NQ Minerals Plc (OTC: NQMLF) shares higher. In our view, a bounce is all but guaranteed.