Experts Hinting Gold May Be Entering A Bull Market That Could Last Over A Decade

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03 Mar, 2021, 13:45 GMT

- FinancialNewsMedia.com News Commentary

PALM BEACH, Fla., March 3, 2021 /PRNewswire/ -- One of the big topics for the gold mining corporations in 2021 has been the prospect of mergers and acquisitions. Analysts predict another round of consolidation for the industry in 2021, although they aren't looking for mega-mergers. Instead, they expect to see a continuation of the trend in 2020 that brought a larger number of smaller deals. In a recent report, Bank of America (BofA) analyst Michael Jalonen and team said they believe the pressure to replace reserves that have been mined will be one of the big drivers for mergers and acquisitions this year. They noted that gold reserves have been falling since 2012, while gold output has remained stable. The report in Investor Place said that: "The BofA team doesn't expect to see mega-mergers in the mining space this year. Instead, they look for senior gold producers to optimize their assets to lower costs and build the next generation of growth projects. However, they also point out that senior producers are keeping a watch for available world-class assets…The BofA team expects more interest in targets in the U.S., Canada, Australia and other parts of the world that are politically safe. They believe the need to replace gold reserves means the M&A market will be a seller's market this year."    Active stocks in the mining markets this week include Barrick Gold Corporation (NYSE: GOLD) (TSX: ABX), Golden Independence Mining Corp. (OTCQB: GIDMF) (CSE: IGLD), Hecla Mining Company (NYSE: HL), Franco-Nevada Corporation (NYSE: FNV) (TSX: FNV), Newmont Corporation (NYSE: NEM) (TSX: NGT).

The report continued: "Jalonen and team said last year's mergers and acquisitions in the gold mining market was partially driven by senior gold producers disposing of non-core assets. This year, they expect senior mid-tier gold producers to review their recently-enlarged asset basis for non-core assets to dispose of. The result could be the creation of new producers and developers this year, just like last year.  Like 2020, the BofA team expects a renewed focus on regional and bolt-on acquisitions where travel is either limited or not required due to the pandemic. However, they also said desktop analysis of potential targets will soon become standard and replace due diligence site visits, serving as a catalyst for even more mergers and acquisitions."

Golden Independence Mining Corp. (CSE: IGLD) (OTCQB:GIDMF)  BREAKING NEWS:  GOLDEN INDEPENDENCE INTERSECTS 1.043 G/T GOLD AND 2.8 G/T SILVER OVER 40 FEET AT INDEPENDENCE PROJECT -  Golden Independence (the "Company") is pleased to announce the next series of drill results from its recently completed 2020 resource expansion drill program at the Independence project, south of Battle Mountain, Nevada. Results from these three reverse circulation (RC) holes include:

  • 0.454 g/t gold and 5.8 g/t silver over 120 feet (36.6 metres)
    • and 1.043 g/t gold and 2.8 g/t silver over 40 feet (12.2 metres)
  • 0.314 g/t gold and 5.6 g/t silver over 270 feet (82.3 metres)
    • including 1.473 g/t gold and 23.3 g/t silver over 20 feet (6.1 metres)
  • 0.274 g/t gold and 3.6 g/t silver over 405 feet (123.4 metres)
    • including 0.475 g/t gold and 3.4 g/t silver over 70 feet (12.3 metres)

"These are the first of a series of Golden Independence holes testing the intrusive at the north end of the property." commented Golden Independence President Tim Henneberry. "While the oxides grades in the intrusive are a little lower than the chert, we continue to intersect good long intervals of continuous lower grade mineralization with shorter higher-grade intervals. The deeper intersection in AGEI-23 of 1.043 g/t gold between 640 and 680 feet is significant as it is suggesting a potential deeper mineralized zone." he continued. "We continue to expand the mineralized footprint at Independence as we work toward a mid H1 new resource estimate." he concluded.

 "While gold grades are a little lower in the intrusive, the project continues to return significant lengths of mineralized material from surface," noted Golden Independence CEO Christos Doulis. "These results continue to support our belief that we will be able to significantly expand the historic oxide resource at the Independence project in the near term." Read this entire release for the Golden Independence news at:  https://www.financialnewsmedia.com/news-igld/ 

Other recent developments in the mining markets include:

Barrick Gold Corporation (NYSE: GOLD) (TSX:ABX) recently released its annual reserve and resource declaration with its Q4 and year-end results to December 31, 2020. Attributable mineral reserves reflect a 76% replacement of depletion, with a consistent reserve grade maintained year-on-year, after adjustment for the disposal of Massawa. Similarly, excluding the impact of Massawa, the net reduction in reserves year-on-year is approximately 2%. Attributable group reserves, reported at $1,200/oz1, stand at 1,300 million tonnes at 1.66g/t for 68 million ounces2 of gold.

Armed with the introduction of on-site mineral resource management and an intensified focus on geology, Barrick has spent the two years since the Randgold merger improving knowledge of its orebodies. At the same time, it has transferred ownership and responsibility for the orebodies to the mines, empowering and integrating the on-site mineral resource, geology and planning teams.  Barrick's mineral resource management and evaluation executive, Rod Quick, says the company has made significant progress in developing Life of Mine optimizations based on high-confidence geological models as well as operating plans, ounce profiles and cost forecasts.

Franco-Nevada Corporation (NYSE: FNV) (TSX: FNV.TO) recently delivered record revenue, EBITDA and net earnings in the third quarter with all material Mining assets having returned to normal operations through the quarter. The Company continued to lead its royalty and streaming peers with the highest EBITDA margins and, in particular, with a record earnings margin of 55% in the quarter. "It is exciting for the future to see the level of organic growth across our portfolio of producing, advanced and exploration assets," stated Paul Brink, CEO. During the third quarter, 25 new royalties were added to the portfolio bringing the number of mining related assets to 316. The Company's Energy assets also benefitted from a rebound in oil and gas prices. Franco-Nevadaexpects to be near the high end of its previously announced guidance ranges for 2020, assuming that the recent strike action at Candelaria is resolved and operations resume in the near term.

Financial Highlights for Q3/2020 vs Q3/2019, were: 134,817 Gold Equivalent Ounces1 ("GEOs") sold (+1%); $279.8 million in revenue – a new record (+19%); $153.9 million of Net Income, or $0.81 per share – a new record (+51%); $39.1 million in Cash Costs3, or $290 per GEO sold; $235.1 million of Adjusted EBITDA4, or $1.23 per share – a new record (+22%); and Debt free.

Newmont Corporation (NYSE: NEM) (TSX: NGT) recently announced full year and fourth quarter 2020 results.  2020 HIGHLIGHTS were: Produced 5.9 million attributable ounces of gold and over 1 million attributable gold equivalent ounces of co-products, gold CAS* of $756 per ounce, and gold AISC* of $1,045 per ounce achieving 2020 full-year guidance; Generated record $4.9 billion of cash from continuing operations and $3.6 billion of Free Cash Flow (97% attributable to Newmont); Ended the year with $5.5 billion of consolidated cash and $8.5 billion of liquidity with a net debt to adjusted EBITDA* ratio of 0.2x; Announced industry-leading dividend framework and declared fourth quarter dividend of $0.55 per share, an increase of 38 percent over the prior quarter and a total declared dividend for 2020 of $1.45 per share**; Completed the 2020 $1 billion share-repurchase program and recently announced a new $1 billion share-repurchase program; Delivered over $2.7 billion to shareholders through dividends and share buybacks in 2019 and 2020; Achieved best safety performance in the Company's history, focusing on fatality risks across our business; Recognized as top-ranked gold miner for the sixth consecutive year in DJSI Index, announced industry-leading climate targets for greenhouse gas emissions and committed $500 million over 5 years to climate change initiatives; Reported industry-leading reserves of over 94 million ounces of gold mineral reserves and 65 million ounces of gold equivalent ounces reserves; and Announced 2021 outlook of 6.5 million ounces for 2021, and between 6.2 and 6.7 million ounces through 2023 and between 6.5 and 7.0 million ounces longer-term through 2025.

Hecla Mining Company (NYSE: HL) recently announced fourth quarter and full year 2020 financial and operating results.  HIGHLIGHTS were: Fourth quarter sales of $188.9 million; cash flow from operations of $64.9 million; free cash flow $28.3 million1 net income of $0.8 million; adjusted net income applicable to common shareholders of $13.0 million, or $0.02 per share2; and adjusted EBITDA of $55.8 million; 2020 silver production of 13.5 million ounces, up 7% and gold production of 208,962 ounces, down 23%, from 2019, which was Hecla's highest annual gold production; 2020 sales of $691.9 million (the highest in the Company's history); cash flow from operations of $180.8 million; free cash flow of $89.8 million1; adjusted net income applicable to common shareholders of $23.1 million, or $0.04 per share2; net loss of $16.8 million; and adjusted EBITDA of $224.3 million; Third highest silver and gold reserves in Company's 130-year history despite significant interruptions to 2020 exploration program due to COVID-19; Exploration discoveries at Midas, Casa Berardi, San Sebastian, Heva Hosco, and Kinskuch expect to be further drilled in 2021; Net debt reduction of approximately $81 million, or 17%, from March 31, 2020; Year-end cash position of $130 million, an increase of $67 million from 2019 with the credit facility undrawn; All-Injury Frequency Rate (AIFR) of 1.22 for 2020, lowest in the Company's history and a reduction of 24% over 2019; Lucky Friday returned to full production levels in the fourth quarter of 2020; and Production guidance increases projected silver production over 2020 production.

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