The price of gold has been soaring and reaching record highs. In last one year alone, its price has surged more than 40%. While it has brought cheers to holders of ASX gold stocks, the analysts are predicting a higher leg of its journey.
Although gold prices are of great relevance, gold stocks are also impacted by many other factors like management, exposure to hedging, resource base, weather conditions and labour availability.
With low interest rate environment setting in, where gold tends to perform better, has the time come to increase investments in these ASX gold stocks.
Newmont Corporation (ASX: NEM)
Newmont Corporation (ASX: NEM) reported its Q2 2024 earnings, posting net income from continuing operations attributable to stockholders of $838 million or $0.73 per diluted share, reflecting a $685 million increase year-over-year. Adjusted EBITDA surged 116% to $1.97 billion. The company ended the quarter with a consolidated cash position of $2.6 billion.
Attributable gold production decreased by 4% to 1,607 ounces, impacted by lower output at Cerro Negro and weather-related disruptions at Lihir. The average realized gold price rose to $2,347 per ounce, up $257 per ounce from the prior quarter. However, Gold CAS increased 9% to $1,152 per ounce, and Gold AISC rose by 9% to $1,562 per ounce.
Newmont anticipates cash outflows of $600 million in 2024 and $700 million in 2025, primarily for the construction of water treatment plants and post-closure management at Yanacocha. On September 11, 2024, Newmont announced an agreement to divest its Telfer and Havieron assets for up to $475 million.
The company maintains a robust cash position, further strengthened by upcoming proceeds from the sale of non-core assets, which will support its growth strategy through both organic and inorganic avenues. Forecasts for FY2024 appear highly promising, with gold production expected to rise to 6,930 Koz, while Gold CAS and Gold AISC are projected to remain stable, potentially boosting margins. Production estimates for the company’s broader portfolio, including silver, lead, and zinc, are also poised for growth. Notably, the Afaho Gold Project saw a 34% production increase driven by higher mill throughput, with further significant advancements. Additionally, the company’s outlook on its Newcrest acquisition remains positive.
The company has demonstrated strong growth, bolstered by rising commodity prices, particularly gold. The 16% increase in EBITDA highlights its operational efficiency, driven by both increasing sales and a reduction in operating costs. Additionally, the company has consistently returned value to shareholders through ongoing share buybacks and dividend distributions, reflecting management’s confidence in the business. With bullish forecasts for gold prices amid anticipated interest rate cuts, the outlook remains favourable. New projects are expected to lower production costs, while the company’s strong cash position and balance sheet provide opportunities for inorganic growth.
Tribune Resources Limited (ASX: TBR)
Tribune Resources Limited (ASX: TBR) released its quarterly financial results on 31 July 2024, detailing performance for the period ending 30 June 2024.
In the reported quarter, Rand and Tribune processed a total of 49,967 tonnes of ore with an average grade of 5.82 g/t at the East Kundana Joint Venture operations, utilizing the Mungari processing plant operated by joint venture partner Evolution Mining Limited. Tribune's share of this processing amounted to 37,475 tonnes.
The combined output of gold from Rand and Tribune during this quarter reached 8,853 ounces. Tribune's entitlement, representing 75% of the total gold produced, was 6,640 ounces.
It is noteworthy that there was no mining activity at Raleigh during this quarter due to a temporary halt pending a seismic investigation following incidents in March 2024. However, some rehabilitation efforts were initiated in the Raleigh decline in June 2024, with no stopes being mined during this period.
Customer receipts increased by $9.41 million, totaling $26.94 million for the quarter, as the Group sold a greater volume of gold compared to the previous quarter to meet operational expenses.
The overall financial outcome for the period indicated a net cash inflow from operating activities of $3.54 million for the June quarter, a significant increase from the $1.2 million net cash inflow recorded for the March quarter.
As of 30 June 2024, cash and cash equivalents stood at $8.915 million, reflecting an increase from $8.770 million as of 31 March 2024.
Tribune remains committed to enhancing its comprehension of the gold mineralizations at EKJV, with immediate objectives centered on identifying promising targets for further drilling and long-term resource expansion. This strategy aims to bolster the sustainability of its valuable and resilient gold-producing asset. Furthermore, the company is dedicated to progressing other gold projects within its portfolio, concentrating on resource development at Raleigh and exploration at the Ambition prospect. Overall, the company is poised to broaden its gold production capabilities by integrating multiple fully operational gold mines into its portfolio in the future.
Source: Company’s Report
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