The price of gold, which has been rising all year, has tailed off slightly over the least several weeks. But gold followers say this could be a real opportunity to buy into gold, especially if there is a 4th quarter rally in the works.
Analysts suggest that gold miners stand to benefit more than other gold opportunities, including Yamana Gold (NYSE: AUY)(TSX: YRI), Corvus Gold (OTC: CORVF)(TSX: KOR), Royal Gold, Inc. (NASDAQ: RGLD) and Bullfrog Gold Corp. (OTC: BFGC).
Investing in the companies that mine gold, rather than physical gold, could present an opportunity to take advantage of a rally, according to Sam Lees, of Fundexpert.co.uk, the online broker and investment service.
This also applies to gold funds where investors can gain higher returns, rather than holding gold itself.
Major mining companies with significant exposure to gold resources stand to benefit most from strong gold economics including Yamana Gold (NYSE: AUY)(TSE: YRI), Corvus Gold (OTC: CORVF)(TSX: KOR), Royal Gold, Inc. (NASDAQ: RGLD), all of whom have gained considerable traction this year as gold rallied.
By the same token, junior mining companies including Bullfrog Gold Corp. (OTC: BFGC), feel the immediate effects of advances from a rising gold market. Bullfrog Gold is considered an undervalued junior that is developing a former Barrick operation in Nevada where positive news of an additional possible Carlin Trend gold is emerging.
Analysts are watching the effects of the recent Fed announcement by Donald Trump and the earnings as positive 3rd quarter numbers roll in.
MINERS OFFER BIGGER OPPORTUNITIES
"You can buy gold coins, or you can buy an ETF that holds physical gold," Sam Lees says. "The evidence suggests that you will generate bigger returns via a fund investing into gold mining companies."
When gold bounced six percent last summer between July 22 and August 21, the Smith and Williamson Global Gold and Resources fund returned 11.5 percent over the same period. That’s a clear example of gold miner’s impact.
Gold miners have also been the biggest beneficiaries of uncertainties during 2017; all the political tension between the U.S. and North Korea, China and the Russian fiasco, have pushed miner’s share prices including Randgold, Corvus, Royal Fresnillo, and others all moving up this year.
Investors in these companies stand to gain an operating leverage: as the gold price goes up, the miners’ margins improve, so the potential return to investors goes up - often at a faster rate than the rise in gold.
In this way, equities can become a better bet than holding the underlying commodity.
So as gold moves down, even slightly, it gives gold watchers reason to pause and reload for the seasonal price swings.
WHY AFFORD GOLD?
Market data group Rediff Business says that gold looks cheap compared to the stock markets at the moment, since the markets are what they call “highly overbought.”
Report data shows gold prices have outperformed the markets -- S&P 500 -- so far in this century, returning 86% more than the market. Those numbers are predicated by the fact that both asset classes were indexed at 100 levels starting December 31, 1999, and based on the latest World Gold Council's Gold Investor report for September 2017.
Remember, the S&P 500 has undergone two major contractions over the past 17 years. Gold, though, has held its value quite well. This fact alone makes it easy for the World Gold Council to point to gold’s appeal as a portfolio diversifier.
The gold-to-S&P 500 ratio is currently near its 10-year lows. In other words, even at its current price, gold is extremely undervalued, says the World Gold Council.
In scanning the horizon for all gold opportunities, junior exploration and mining companies could be the least expensive option when compared to their potential for immediate upside if gold prices rise.
NEVADA’S BULLFROG UNDERVALUED
The current gold climate is also bringing some very interesting plays to the forefront. In the junior category, Bullfrog Gold is getting attention for its position in Nevada.
The company has a high-grade flagship property on trend in the perfect spot between Corvus Gold’s North Bullfrog and Mother Lode Projects, and the recently announced successes of Northern Empire Resources at its Sterling Gold Project.
Both Corvus and Northern Empire have announced monster grades on their own Nevada Bullfrog projects.
Northern Empire recently reported “extremely exciting results” on its first drill holes for its own Bullfrog trend, the Sterling Property — reporting 1.47g/t over 47.24 meters.
Bigger news came from Corvus Gold’s results from a drill program on its Mother Lode Deposit to the SE of Bullfrog Gold’s property. Corvus reported 2.69 g/t gold over 37.2 meters, including 11 meters at 5.78 g/t, and the discovery of a new Lower Zone with 25.6 meters at 2.17 g/t gold.
All three companies’ projects are hosted in the same structure of the past producing Bullfrog Mine (2.3 million ounces produced).
Bullfrog’s flagship property, the Bullfrog Gold Project, is located 120 miles northwest of Las Vegas, Nevada and includes an ex-Barrick pit that recovered 2,300,000 ounces, and the northern third of the Bullfrog deposit.
While the region is well developed, Bullfrog Gold is currently showing the single steepest discount on gold-in-the-ground valuations.
Bullfrog Gold announced estimates in its 43-101 report in June 2017 of 525,000 ounces averaging 1.02 g/t using a gold price of $1200/oz and a base case cutoff grade of 0.36 g/t. Inferred resources were estimated at 120,000 ounces of gold averaging 1.20 g/t.
With those kind of economics and $1400 an ounce gold, Bullfrog would be an amazing value. And $1400 an ounce is a real possibility.
Reviewers expect the demand for physical gold in emerging market countries – particularly China and India, the top-two biggest gold consumers – to support prices in the fourth quarter. Strong seasonal factors and the Fed implementing monetary policies could also push prices.
Commerzbank forecasts gold prices will average $1,300 at year-end and rise into 2018, eventually reaching $1,400.
Investors are onboard and are getting in even earlier than expected. This should give credence to the fall prediction and possibly gold’s best quarter.
POTENTIAL COMPARABLES
Yamana Gold (NYSE: AUY)(TSE: YRI)
Yamana Gold Inc. operates as a gold producer in Canada, Brazil, Chile, and Argentina. The company explores for precious metals, gold, silver, and copper. It primarily holds interests in the Chapada, El Peñón, Canadian Malartic, Gualcamayo, Minera Florida, Jacobina, and Brio Gold mines. The company was formerly known as Yamana Resources Inc. and changed its name to Yamana Gold Inc. in July 2003. Yamana Gold Inc. was founded in 1980 and is based in Toronto, Canada.
Corvus Gold (OTC: CORVF)(TSX: KOR)
Corvus Gold Inc. is a North American gold exploration and development company, focused on its near-term gold-silver mining project at the 100% owned Nevada, North Bullfrog project. In addition, the Company controls a number of royalties on other North American exploration properties representing a spectrum of gold, silver and copper projects. Corvus is committed to building shareholder value through new discoveries and the expansion of those discoveries to maximize share price leverage in a recovering gold and silver market.
Royal Gold, Inc. (NASDAQ: RGLD)
Royal Gold, Inc., together with its subsidiaries, acquires and manages precious metal streams, royalties, and similar interests. It focuses on acquiring stream and royalty interests or to finance projects that are in production or in development stage in exchange for stream or royalty interests. As of June 30, 2017, the company owned stream interests in 4 producing property and 2 development stage properties; and owned royalty interests in 35 producing properties, 18 development stage properties, and 135 exploration stage properties. Its principal producing stream and royalty interests on properties are located in the United States, Canada, Chile, the Dominican Republic, Ghana, and Mexico.
For a more in-depth look into BFGC you can view the in-depth review at USA News Group:
http://usanewsgroup.com/2017/11/12/gold_bull_run-2-2-2-2/
USA News Group
http://usanewsgroup.com
[email protected]
Legal Disclaimer/Disclosure:
Disclaimer: Nothing in this publication should be considered as personalized financial advice. We are not licensed under securities laws to address your particular financial situation. No communication by our employees to you should be deemed as personalized financial advice. Please consult a licensed financial advisor before making any investment decision. This is a paid advertisement and is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. usanewsgroup.com is a wholly-owned subsidiary of Market IQ Media Group, Inc. (“MIQ”). MIQ has been paid a fee for Bullfrog Gold Corp. advertising and digital media. There may be 3rd parties who may have shares of BFGC, and may liquidate their shares which could have a negative effect on the price of the stock. This compensation constitutes a conflict of interest as to our ability to remain objective in our communication regarding the profiled company. Because of this conflict, individuals are strongly encouraged to not use this newsletter as the basis for any investment decision. The owner/operator of USA News Group owns shares of BFGC that were purchased in the open market and will not be selling any shares within 72 hours of this publication date (September 18, 2017), afterwards we reserve the right to buy and sell shares of BFGC without any further notice.
While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment
