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The gold focus moved from large cap to small cap exploration companies in Australia

Team Veye | 12 Jun 2018

The gold focus moved from large cap to small cap exploration companies in Australia

“For more than two thousand years gold’s natural qualities made it man’s universal medium of exchange. In contrast to political money, gold is honest money that survived the ages and will live on long after the political fiats of today have gone the way of all paper.”— Hans F. Sennholz

Australia’s gold industry remains its third largest export earner more than 150 years after gold’s discovery in 1851. The industry is an important source of economic activity and jobs in many regions, with gold mining occurring in all states and the Northern Territory. While production is expected to grow in coming years, the Australian gold industry also confronts challenges in a highly competitive global marketplace. (Source – Mineral Council of Australia)

After four years of declining investment in the industry, the global mining industry marked a 14 percent increase in non-ferrous (non-iron) exploration to nearly $US8 billion ($10.3 billion) last year out of which only Gold exploration accounted for 73% increase. (Source – S&P)

They spent $US4.1 billion globally — a jump of 22 percent over 2016 – to account for more than half the global exploration budget. The interesting part of this exploration is that it was the mainly the small companies which were mainly injecting cash into exploration, while the majors continued to allocate only a small part of their revenue on finding more minerals.(S&P).

Total Australian exploration expenditure rose 4.4 percent to $20.9 million in the December quarter. The largest increase came from gold exploration, which rose 8.3 percent to $16 million.

The table below shows that some of the small-cap Gold stocks which increased more than 200% in last year:

Company ASX Price March 2017 Price March 2018 % Change Market Cap AUD

Company

ASX

Price March 2017

Price March 2018

% Change

Market Cap AUD

Anglo Australian Resources

AAR

0.022

0.278

255%

22556976

Apollo Consolidated

AOP

0.08

0.255

219%

39061340

BBX Minerals

BBX

0.065

0.205

215%

79092456

Force Commodities

4CE

0.031

0.095

206%

39892008

Activex

AIV

0.09

0.16

78%

28356544

Alliance Resources

AGS

0.087

0.12

38%

13036740

Aurelia Metals

AMI

0.26

0.36

38%

312295968

 

In coming weeks, we shall be publishing reports highlighting Gold companies, which are still a potential buy as this is an important space to watch out for as the Gold prices are reviving.

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