Gold investments are expected to remain strong, especially with investors set to pump $2 trillion to $3 trillion into the market, as noted by Forbes. One of the biggest reasons for that is the long-term damage to economies and massive increases in government borrowing, as a result of the pandemic. In fact, according to a recent report from precious metals manager, Sprott, as noted by Forbes, “a mere 20% of investors make allocations to gold, which is at the small level of around 1-2% of those investors’ assets. However, Sprott now sees the portion of investors wanting gold doubling to 40% and likely wanting to allocate 3-5% of their assets to buy the metal, on average.” If that’s the case, that’s where the $2 trillion to $3 trillion comes into play. That’s also creating big opportunity for gold companies such as Eclipse Gold Mining Corporation (TSXV:EGLD)(OTC:EGLPF), Wheaton Precious Metals Corp. (NYSE:WPM), Agnico Eagle Mines Ltd. (NYSE:AEM), Newcrest Mining (OTC:NCMGY), and AngloGold Ashanti Limited (NYSE:AU).
Eclipse Gold Mining Corporation (TSXV:EGLD)(OTC:EGLPF) BREAKING NEWS: Eclipse Gold Mining Corporation is pleased to announce the commencement of Phase II drilling at its Hercules Gold Project in Nevada’s Walker Lane trend.
A reverse circulation drill rig is now turning at the first target site of the Company’s Phase II program, which is planned to comprise 18 holes totaling approximately 6,750 meters. For further details of the Phase II drill program, please see the Company’s August 18, 2020 news release.
“Targeted drilling, guided by our recent Phase I drilling and ground IP geophysical survey results, should give us a greater understanding of the nature and scale of Hercules’s epithermal gold system,” noted Dr. Warwick Board, Vice President Exploration for Eclipse.
“We are excited to be testing the Hercules Structural Zone as a potential feeder to the system, the possible link between the Cliffs and Hercules targets at depth, and the apparent thickening of the system to the south of these target areas”.
Further details on the Phase I drill program and ground IP geophysical survey are provided in the Company’s June 10 and July 21, 2020 press releases.
The Phase II drill program may be further refined based on the results of the electromagnetic survey currently being completed (See August 4, 2020 press release). Envirotech Drilling LLC of Winnemucca, NV is operating the current drill rig. COVID-19 procedures and precautions remain in place to ensure the safety of all site staff and contractors.
Airborne Geophysical Survey Update — The Company reports that almost 1,000 line kilometres have been completed of the 2,200 line kilometres planned for its Airborne Geophysical Survey. Final results are expected in September.
Other related developments from around the markets include:
Wheaton Precious Metals Corp. (NYSE:WPM) is pleased to announce that its Board of Directors has declared its third quarterly cash dividend payment for 2020 of US$0.10 per common share. The third quarterly cash dividend for 2020 of US$0.10 will be paid to holders of record of Wheaton Precious Metals common shares as of the close of business on August 27, 2020 and will be distributed on or about September 10, 2020. Under the Company’s dividend policy, the quarterly dividend per common share is targeted to equal approximately 30% of the average cash generated by operating activities in the previous four quarters divided by the Company’s then outstanding common shares, all rounded to the nearest cent. To minimize volatility in quarterly dividends, the Company has set a minimum quarterly dividend of $0.10 per common share for the duration of 2020 representing an 11% increase relative to 2019. Under this policy, the forecast annualized dividend for 2020 would represent an increase of more than 90% over a five-year period.
Agnico Eagle Mines Ltd. (NYSE:AEM) reported a quarterly net income of $105.3 million, or net income of $0.44 per share, for the second quarter of 2020. This result includes non-cash mark-to-market gains on warrants of $33.7 million ($0.14 per share), derivative gains on financial instruments of $16.0 million ($0.07 per share), foreign currency translation gains on deferred tax liabilities of $15.2 million ($0.06 per share), and various other adjustments losses of $3.9 million ($0.01 per share). Excluding these items would result in adjusted net income1 of $44.3 million or $0.18 per share for the second quarter of 2020. For the second quarter of 2019, the Company reported net income of $27.8 million or $0.12 per share. Included in the second quarter of 2020 net income, and not adjusted above, are a non-cash stock option expense of $3.2 million ($0.01 per share) and temporary suspensions costs related to the COVID-19 pandemic of $22.1 million ($13.0 million, net of tax, or $0.05 per share) and direct and incremental COVID-19 costs of $2.3 million ($1.4 million, net of tax, or $0.01 per share).
Newcrest Mining (OTC:NCMGY) has contributed more than K1.4 million to help deliver more than 30,000 pairs of gloves, surgical masks, protective goggles and face shields to keep frontline workers safe in Papua New Guinea. This is on top of contributions from the Australian and Japanese governments which enabled UNICEF, in partnership with the National Department of Health, to procure personal protective equipment (PPE) for frontline workers to all 22 provinces across the country. The contribution was made as part of Newcrest’s 20 million Kina Community Support Fund for Papua New Guinea to help the country face the challenges posed by the COVID-19 pandemic.
AngloGold Ashanti Limited (NYSE:AU) withstood COVID-19-related disruptions to deliver a solid first half production performance and a surge in free cash flow generation to $177m, most of it coming in the three months to June 2020. Free cash flow rose to an inflow of $177m for the first six months of the year, compared to an outflow of $31m in the same period last year. Of that amount, $173m was generated in the second quarter of the year. Free cash flow before growth capital, the metric on which dividends are calculated, rose 376% – or nearly fivefold – to $324m. “The business is in excellent shape – cash flows are extremely robust, demonstrating the significant operating leverage we have to this strong gold price,” Kelvin Dushnisky, outgoing Chief Executive Officer (CEO) of AngloGold Ashanti, said. “While the recent rally in the gold price is welcome, tight cost and capital management will continue to be the key focus areas for us as we work to capture this widening margin and increase reserves.”
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