Gold’s performance in 2016 has been somewhat of a surprise. Last year, the precious metal was written off as the U.S. Federal Reserve indicated four rate hikes in 2016. It was the Fed’s ultra-loose monetary policy measures that had sparked a multi-year rally in gold, pushing prices to record high levels.
Gold was expected to struggle this year but instead has posted strong gains. The gains have come on the back of a dovish Fed. However, in the last few days, the Fed’s stance has changed once again. Last week, Fed Chair Janet Yellen hinted at a rate hike in September. Vice Chair Stanley Fischer has even said that two rate hikes are possible this year. All these developments are negative for gold and not surprisingly, prices have come under pressure in recent days.
For gold mining companies, the recovery in gold prices has come as a blessing. Remember that many of these companies had been cutting costs in recent years to adjust to the low price environment. The pullback in gold prices is bad news for miners then but given that their costs are significantly lower now, the impact of a pullback in gold prices should not be significant on gold mining stocks.
Knick Exploration Inc. (TSX-Venture:KNX) is a Val-Dor, Quebec-based company focused on identifying new gold deposits in its properties located within gold mining areas, such as Val-d'Or (Quebec) and West Timmins (Ontario) mining camps.
The company’s exploration projects include the East-West gold project, Triple Lake property, Malartic West property and Trecesson Gold Property. It is engaged in exploring the East-West gold property along strike between Kiena Mine and gold producer Marban Mine. Its Triple Lake property is situated in Bartlett, Musgrove and McArthur Townships, over 30 kilometres south of the city of Timmins, Ontario.
This morning, Knick Exploration announced the posting of its East-West gold property Drill Program Proposal and Methodology on its website. The company noted that two high grade zones on the East-West are suggestive of deposits situated on properties immediately east and west of the property.
The Marban deposit of Osisko Mining Inc. (TSX:OSK) lies to the west and Wesdome’s (TSX:WDO) Kiena Mine Complex to the east where ongoing exploration work is returning positive results.
KNX also announced that it will be closing a flow through financing on or before September 15. The flow through financing is at $0.05 per common share of its common stock accompanied with one warrant of the company per common share.
Shares of KNX have been on a tear in 2016, specifically since early August and continue to trade near their 52 week high at last check.
