The U.S. Federal Reserve concluded its two-day monetary policy meeting on Wednesday.
While the Fed was not expected to announce a rate hike at its latest meeting, what surprised several investors was the Fed’s forecast for rate hikes.
In December, the Fed had predicted that it would hike benchmark interest rates four times this year. On Wednesday, the Fed said that it now expects to hike benchmark interest rates at the most just two times this year. The Fed’s dovish stance is a positive for non-interest bearing assets such as gold.
Indeed, gold prices have risen sharply in trading today. At last check, prices were up 2.79% to $1,263.60 an ounce. The sharp rise in gold prices has also boosted gold mining stocks. Among the major gold miners, Barrick Gold Corporation (NYSE: ABX) was last trading almost 1.9% higher. Newmont Mining Corp. (NYSE: NEM) was up 2.40%, at last check.
Junior gold mining stocks are also gaining momentum. One of the biggest gainers today is Rupert Resources Ltd. (TSX-Venture:RUP).
Based in Toronto, Rupert is a gold exploration company, seeking out mineral exploration and evaluation opportunities. The company has two projects located in Ontario and British Columbia. At last check, RUP shares were trading 58.82% higher at $0.135 on volume of 149,000, which is nearly five times the daily average volume of 30,267.
It is not just the sharp rise in gold prices that has boosted RUP shares. The stock is also gaining momentum on the back of a major announcement.
This morning, Rupert Resources announced that it has entered into an option agreement with the bankruptcy estate of Lappland Goldminers Oy. According to the agreement, RUP has acquired a six-month option to acquire the Pahtavaara gold mine, mill and exploration permits and concessions that represent a 124-square-kilometre land package in Finland in the highly prospective Central Lapland Greenstone Belt.
The total cash consideration to exercise the Option is upfront cash payments totaling $500,000 U.S., and in addition, RUP would be required to pay $2 million U.S. from a production royalty on 1.5% of go-forward revenues generated from the mine.
Brian Hinchcliffe, Director of Rupert Resources, said the company has identified the right combination of production assets and exploration potential on its strategic land position for the next mining cycle.
Hinchcliffe further said that the company looks forward to bringing its exploration team's experience to bear on developing both open and underground gold targets in one of the world's most highly prospective and underexplored mineral provinces.
