Gold fell sharply from its March highs on higher rates and a stronger dollar. High rates limited gold’s rise above the $1,800 per ounce mark. However, according to RBC Capital Markets, heightened geopolitical tensions and safe-haven undercurrents could propel gold prices above $2,030 an ounce.
Traditionally, gold is considered a store of value and a refuge asset. The yellow metal is a physical commodity whose quantity is limited, which allows it to retain its value even in times of economic turbulence. Gold is also considered a hedge against inflation.
Additionally, Charlie Morris, chief investment officer of Bytetree Asset Management, thinks gold could push $7,000 by the end of the decade. He also said he sees interest rates near the top, which could give the metal a push in the right direction.
Therefore, we believe that these fundamentally strong gold mining stocks, Torex Gold Resources Inc. (TORXF), GCM Mining Corp. (TPRFF) and Jaguar Mining Inc. (JAGGF), could be solid purchases to protect its portfolio against the uncertain macroeconomic environment.
Torex Gold Resources Inc. (TORXF)
Based in Toronto, Canada, TORXF operates as an intermediate gold producer in Mexico. The Company primarily owns a 100% interest in the Morelos Gold property located southwest of Mexico City. It also exploits deposits of silver, copper and carbon.
On August 18, TORXF announced the finalization of a credit agreement with a syndicate of banks, which increases the amount of credit available to $250 million and extends the maturity of the facilities until 2025. This could improve the position liquidity of the company.
On July 7, TORXF announced the results of its resource expansion and exploratory drilling completed in the expanded Media Luna area. Jody Kuzenko, President and CEO, said, “A key pillar of Torex’s strategy is renewed interest in drilling and exploration, and our latest drilling results at the Media Luna Cluster reinforce our positive outlook. on our ability to complete future production at Media Luna. .”
For the fiscal second quarter that ended June 30, TORXF’s revenue increased 14.1% year-over-year to $235 million. Its adjusted net income rose 20.3% from the year-ago quarter to $57 million. Adjusted net earnings per share improved 20% from the same period a year earlier to $0.66.
The consensus revenue estimate of $228.87 million for the fiscal third quarter ending September 2022 indicates a 5.4% year-over-year increase.
The stock fell slightly intraday to close its last trading session at $7.43.
TORXF’s strong fundamentals are reflected in its POWR Rankings. The stock has an overall A rating, which equates to a Strong Buy in our proprietary rating system. POWR ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
TORXF has a value and quality rating of A and a stability rating of B. In the 53-stock Miners – Gold the industry, it is ranked #1.
Click here to see additional POWR ratings for TORXF (Growth, Momentum, and Sentiment).
GCM Mining Corp. (TPRFF)
TPRFF, headquartered in Toronto, Canada, acquires, explores, develops and operates gold and silver properties, primarily in Colombia. The company has interests in the Segovia operations, the Zancudo project and the Marmato project.
On August 18, TPRFF and Aris Gold Corporation (ALLXF) announced that they had filed a joint management information circular and related meeting materials. The meeting must approve the proposed business combination of TPRFF and Aris Gold. The combined entity is expected to operate as Aris Mining Corporation with increased scale and diversification.
On August 17, TPRFF declared a monthly dividend of CA$0.015 per common share, payable to shareholders on September 15. This reflects the cash-generating capacity of the business.
TPRFF revenue increased 5.2% year-over-year to $101.37 million for the second quarter of fiscal 2022. Net income was $38.97 million dollars, up 30.8% over the same period a year earlier. Free cash flow was $20.48 million, up substantially from its negative value a year ago.
Street’s fiscal 2022 revenue estimate of $404.90 million indicates a 5.8% year-over-year improvement.
The stock fell slightly intraday to close its last trading session at $2.48.
It’s no surprise that TPRFF has an overall rating of B, which translates to Buy in our POWR rating system. It has an A rating for value and a B rating for stability and quality. TPRFF is ranked #2 in the Miners – Gold industry.
To view additional POWR ratings for Growth, Momentum, and Sentiment for TPRFF, Click here.
Jaguar Mining Inc. (JAGGF)
JAGGF is a junior gold mining company that acquires, explores, develops and operates gold-producing properties in Brazil. The company, headquartered in Toronto, Canada, owns the major assets in the Iron Quadrangle in Minas Gerais, Brazil.
On June 10, JAGGF announced a notice of normal course issuer bid to purchase for cancellation up to 3,623,640 common shares in the capital of the company. The company intends to increase long-term shareholder value by purchasing and canceling common stock at a price below its underlying value.
For the fiscal second quarter ended June 30, JAGGF’s revenue increased 4.4% year-on-year to $37.93 million. Net profit and EPS improved 218.1% and 225% from the prior year period to $9.48 million and $0.13.
The consensus EPS estimate of $0.32 for fiscal 2023 indicates an 82.9% year-over-year increase. Similarly, the consensus revenue estimate for the same year of $161.39 million reflects a 10.8% increase over the prior year.
JAGGF shares gained slightly intraday to close its last trading session at $2.22.
This promising outlook is reflected in JAGGF’s POWR ratings. The stock has an overall rating of B, which is equivalent to Buy in our proprietary rating system. JAGGF has a quality rating of A and a value and momentum rating of B. It is ranked #3 in the mining industry – gold.
In addition to the POWR ratings we have shown above, one can see the JAGGF ratings for Growth, Stability, and Sentiment. here.
TORXF shares were trading at $7.17 per share Thursday morning, down $0.26 (-3.46%). Year-to-date, the TORXF is down -30.92%, compared to a -17.20% rise in the benchmark S&P 500 over the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research. After…