Austral Gold: Junior's Time to Shine
Updated
Looking at Junior Gold as the next big market to trade, obviously due to rising gold and silver prices, but I like this company for a few reasons. Obviously being in South America the local currencies are trash (EM FX at record lows) so costs will likely remain low, especially if oil remains relatively cheap. Recently margins have begun to grow due to rising gold and I think there are companies like Austral that are in an interesting position because they are too small to be bought buy the large ETF's due to their purchase rules, yet they are unlocking significant value for shareholders. Currently the company is raising capital for drilling/exploration activities at their existing mines at $0.08 offering only to existing shareholders, so I don't think the dilution will really hit the market.
I think this offers a trade opportunity with an interesting risk/reward profile. As long as this negative-interest bond madness continues we can expect gold to continue rallying higher, which means the margins at the miners will swell! ETF's can't touch these until they get bigger so the time to aquire shares is now before the gold market as a whole is revalued much higher than it is today.
Highlights:
- Existing Guanaco/Amancaya operations providing cashflow near Yamana Gold's El Penon deposits ( June 2019 AISC < $1000, gold at over $1500 currently)
- Exploration potential in both Chile and Argentina (existing reserves assayed at $1300 Gold)
- Rising silver prices while Casposo silver operation on-hold (reserves in ground gaining value)
- Austral can produce lots of silver, meaning a big drop in the gold/silver ratio will leverage the margin expansion faster than gold producers alone.
The company has some debt, which obviously poses a hurdle, but repayments are going well with the recent increased cashflow. Mineral reserves need to expand so expect drilling and associated costs, there is a deal offering to existing shareholders to fund drilling this year.
Looking technically there have been 2 other historic buying opportunities at these levels, and the market seems to be close to a potential breakout of the falling wedge pattern. If you zoom in on the last year the stock has traded in a range and despite the thin volume there is a potential cup + handle formation holding just below the 0.09 level. I'm obviously bullish and have a long position.
Please comment if you have any thoughts on AGD/AGLD. GLTA.
I think this offers a trade opportunity with an interesting risk/reward profile. As long as this negative-interest bond madness continues we can expect gold to continue rallying higher, which means the margins at the miners will swell! ETF's can't touch these until they get bigger so the time to aquire shares is now before the gold market as a whole is revalued much higher than it is today.
Highlights:
- Existing Guanaco/Amancaya operations providing cashflow near Yamana Gold's El Penon deposits ( June 2019 AISC < $1000, gold at over $1500 currently)
- Exploration potential in both Chile and Argentina (existing reserves assayed at $1300 Gold)
- Rising silver prices while Casposo silver operation on-hold (reserves in ground gaining value)
- Austral can produce lots of silver, meaning a big drop in the gold/silver ratio will leverage the margin expansion faster than gold producers alone.
The company has some debt, which obviously poses a hurdle, but repayments are going well with the recent increased cashflow. Mineral reserves need to expand so expect drilling and associated costs, there is a deal offering to existing shareholders to fund drilling this year.
Looking technically there have been 2 other historic buying opportunities at these levels, and the market seems to be close to a potential breakout of the falling wedge pattern. If you zoom in on the last year the stock has traded in a range and despite the thin volume there is a potential cup + handle formation holding just below the 0.09 level. I'm obviously bullish and have a long position.
Please comment if you have any thoughts on AGD/AGLD. GLTA.
Trade active
Interesting how none of the positive news really moved the stock until gold broke back above $1600. Looking at 0.20 for first resistance followed by consolidation and a subsequent break higher. Retail investors are running this show right now until the market cap gets large enough for ETF's to purchase. GLTANote
Special 0.009AUD dividend... looking like it wants to test the upper teens. Cash is flowing.Note
20 cents, watch for a pullback if you're looking to get long!Note
Okay, so AGD has broken out of a bullish rising wedge pattern on 10x normal volume days before earnings and just after a special dividend. Things are looking like they will escalate from here.GLTA
Note
Revelo acquired, negative debt, more gold at existing mine found. 6k ounces in inventory and 12M in cash.What a junior!
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