Four Stocks That May Benefit As Gold Rises

According to MarketWatch, Moody's Investors Service has downgraded its rating of the U.S. sovereign credit rating to "negative," although it has kept its rating of U.S. sovereign debt at a triple-A rating. A potential negative turn in the U.S. economy could be a major boon for gold, which does well as a "safe haven" investment when uncertainty rises.

Ken Griffin of Citadel commented that high inflation may be here to stay and that U.S. spending may be unsustainable in the current market. Griffin believes that this is in part due to rising global conflict: "The peace dividend is clearly at the end of the road. We are likely to see higher real rates, and we're likely to see higher nominal rates."

Griffin has also noted his positive opinion of gold, saying, "As I have repeatedly emphasized, gold has no political attachment, no printing press, and no debt obligation. I invest in gold through equities where you can find phenomenal leverage to the gold price."

Griffin predicted that the country's spending will negatively impact confidence in the economy as consumers realize "something is not quite right," and "the minute we start to print dollars just to deal with the possibility of a default, our economy's going into a deep tailspin." 

Griffin has also noted his positive opinion of gold, saying, "As I have repeatedly emphasized, gold has no political attachment, no printing press, and no debt obligation. I invest in gold through equities where you can find phenomenal leverage to the gold price."

Financial institutions are also beginning to renew their interest in gold as an investment, including Goldman Sachs, which reduced its Brent average price forecast for 2024 to US$92 as opposed to US$98. The institution put out a statement that said, "We believe that a fading monetary policy drag, receding recession fears, and reduced industrial destocking will support demand and spot prices in 2024."

Gold Mining Going Strong

In mid-October, Technical Analyst Clive Maund released an updated analysis of the gold market, which he believes is about to get big: "Gold's latest 6-month chart puts this move in context, and we can see that it rocketed into a zone of quite heavy resistance near the apex of the Triangle shown that it earlier broke down from . . .  Technically, the magnitude of this move and the volume driving it strongly suggests that this is more than just a short covering rally and marks the start of a much bigger move."

Frik Els with Mining.com stated that, despite cuts in budgets, gold mining is still the dominant force within exploration, comprising slightly less than US$10 billion, and gold juniors comprise roughly 38% of all exploration in 2023.

Frik Els with Mining.com stated that, despite cuts in budgets, gold mining is still the dominant force within exploration, comprising slightly less than US$10 billion, and gold juniors comprise roughly 38% of all exploration in 2023.

According to Els, the market is exceptionally hot in the Asia Pacific region, which actually increased gold exploration budgets in contrast to the rest of the world.

As we keep an eye on the gold market, there are some companies which may benefit from its possible soaring prices. 

Kainantu Resources Ltd.

In April of 2023, Kainantu Resources Ltd. (KRL:TSX.V; 6J0:FSE) released an excellent set of assay results from its Ontenu Prospect, where it found 1.55 g/t of gold (Au), 20.8 g/t silver (Ag), and 0.39% copper (Cu).

The company has a number of other projects, including the KRL North and KRL South, the May River Project, and the Kili Teke Project. The Kili Teke Project is the most recently acquired project.

Analysts Say Stock Set To Rise

The company was reviewed by a couple of analysts in July of last year. Clive Maund rated the company as a "Buy" for potential investors, commenting, "We can see on its charts below that it got badly beaten up by the severe sector decline of the past couple of months, but with the sector now deeply oversold, we see that the stock has been under persistent strong accumulation for several weeks and it looks to be very close to breaking out."

Bob Moriarty also looked at Kainantu and concluded that the company's stock had the potential to increase. Moriarty cited the company's deal with Harmony Gold for a new project in Papua New Guinea and the company's successful drill results.

The company has a number of catalysts to report, according to its investor presentation, intended to move the company toward drilling, including integrating the company's geophysical and geochemical analyses of the KRL South property, an update on progress related to the May River property, and closing the transaction related to Kili Teke.

Ownership and Share Structure

Reuters provided a breakdown of the company's ownership and share structure, where management and insiders own approximately 21.22% of the company. According to Reuters, Director Geoff Lawrence owns 15.57% of the company with 15.80 million shares, Director Matthew Jonathon Rayden Salthouse owns 4.07% of the company with 4.13 million shares, Director Dain Matthew Currie owns 1.36% of the company with 1.38 million shares, Director Marcus Engelbrecht owns 0.18% of the company with 0.18 million shares, and Director David Loretto owns 0.04% of the company with 0.04 million shares.

Reuters reports that institutions, in the form of Season Cove Ltd., own 7.54% of the company with 7.65 million shares.

According to Reuters, there are 101.43 million shares outstanding and 72.25 million free float traded shares, while the company had a market cap of CA$1.84 million and trades in the 52-week period between CA$0.02 and CA$0.13.

Western Exploration Inc.

In September, Western Exploration Inc. (WEX:TSX.V; WEXPF:OTC) announced an update related to drilling on its Aura gold and silver project located in Nevada.

CEO and President Darcy Marud commented on the geophysics program it began in July, stating, "Geophysics can be an important tool for identifying extensions of mineralization and favorable geology undercover and at depth."  

69.3% Gold Extraction

Technical Analyst Clive Maund reviewed the company on July 26, 2023, where he stated that the company was a "Speculative Buy." Maund highlighted the company's assay results from Doby George, where it achieved 69.3% gold extraction, as well as a private placement worth CA$1.55. Maund commented on the company's stock: "Although it hasn't yet broken out of the downtrend, it looks like it is at a cyclical low and the appearance of a couple of prominent bull hammers on the chart last week, doubtless due to the general improvement across the sector, shows that it is at least ‘thinking about it."

According to the company's investor presentation, Western Exploration has a number of catalysts to report. Drill results for Gravel Creek set to come out in Q4 of 2023. A resource update for Gravel Creek will be in Q1 or Q2 of 2024. Drilling is set to take place on Gravel Creek and Doby George in Q3 or Q4 of 2024, and a PFS for Doby George is set to come out in Q4 of 2024.

Ownership and Share Structure

Reuters provided a breakdown of the company's ownership and share structure, where management and insiders own approximately 2.81% of the company. According to Reuters, Chairman Marceau Nicolas Jean Schlumberger owns 1.91% of the company with 0.66 million shares, CEO and President Darcy E. Marud owns 0.56% of the company with 0.19 million shares, Director Gerard Emmanuel Munera owns 0.24% of the company with 0.08 million shares, and Director Nicolas J.R. Schlumberger owns 0.10% of the company with 0.04 million shares.

Institutions own approximately 74.79% of the company, stated Reuters, as Golkonda, LLC, owns 57.97% of the company with 19.97 million shares, Agnico Eagle Mines Ltd. (a CA$32 billion market cap major mining company) owns 15.80% of the company with 5.44 million shares, and US Global Investors, Inc., owns 1.02% of the company with 0.35 million shares.

Reuters reports that there are 34.45 million shares outstanding and 8.07 million free float traded shares, while the company has a CA$16.23 million market cap and trades in the 52-week period between CA$0.65 and CA$2.40.

StrikePoint Gold Inc.

StrikePoint Gold Inc. (SKP:TSX.V; STKXF:OTCQB) recently found a large (2.6 km2) multi-element soil anomaly on the Walker Lake gold trend through geophysical surveys and geological mapping.

CEO Mike Allen commented that this find was "coincident with resistivity and chargeability highs and projected ground preparation by multiple structures. The company is evaluating additional geophysical and geological work while targeting a drilling program for late 2023 or early 2024."

Further Drilling Ahead for Walker Lane

Thibaut Lepouttre of Caesars Report highlighted the company's change of CEO to Michael Allen, who has previous experience in the Nevada mining scene, and the company's acquisition of Walker Lane. Lepouttre commented, "StrikePoint will have to issue just over 6.4 million shares . . . and issue a 3% NSR to Orogen. 1/6^th of that royalty can be repurchased for US$2.5M. And although that NSR is pretty high, it effectively is a low-cost acquisition with almost no cash to be paid to the optionor."

Strikepoint has a number of catalysts to report, according to its investor presentation, including additional geophysics for the Cuprite Project, as well as an application for drill permits and a drill program for the project.

Ownership and Share Structure

Reuters provided a breakdown of the company's ownership and share structure, where management and insiders owns approximately 0.86% of the company. According to Reuters, Executive Chairman and Director Shawn Khunkhun owns 0.55% of the company with 1.17 million shares, President and CEO Michael G. Allen owns 0.14% of the company with 0.30 million shares, Director Ian Richard Harris owns 0.13% of the company with 0.28 million shares, and Director Adrian Wallace Flemming owns 0.04% of the company with 0.08 million shares.

Reuters reports that institutions own approximately 16.42% of the company, as 2176423 Ontario Ltd. owns 13.96% of the company with 29.84 million shares, US Global Investors, Inc., owns 1.29% of the company with 2.75 million shares, and Sprott Asset Management LP owns 1.17% of the company with 2.50 million shares.

According to Reuters, there are 213.78 million shares outstanding with 182.1 million free float traded shares, while the company has a market cap of CA$6.2 and trades in the 52-week period between CA$0.04 and CA$0.12.

Dakota Gold Corp.

Dakota Gold Corp. (DC:NYSE American) recently closed an investment agreement with Orion Mine Finance worth US$17 million, where the company agreed to sell 6,666,667 shares valued at US$2.55 per share to Orion, which thereafter owned roughly 7.78% of the company.

This agreement was to fund the company's gold exploration and developments projects in South Dakota surrounding the historic Homestake Mine which produced over +40 million ounces of gold over its lifetime.  

86% Return for Investors

Peter Bell with Canaccord Genuity reviewed Dakota Gold Corp. as a "Speculative Buy" and named a target share price of US$5.50 which represents a potential 86% return for investors. Bell highlighted the company's record of high grades and its newly discovered JB Gold Zone in Homestake Mine-style gold mineralization on the Maitland project as positive drivers for the company.

Bell commented, "We believe the new JB gold zone could be Dakota's most significant discovery to date."

As for catalysts, the company has now transitioned from widely spaced drill holes designed to define stratigraphy in the JB Gold Zone to directional drilling in areas between the previous drill holes. In addition to the JB Gold Zone, the company has also said it will be drilling the Tertiary-aged epithermal gold mineralization found in the Unionville Zone on the Maitland project at tighter spacing in advance of developing a maiden resource.

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Ownership and Share Structure

Reuters provided a breakdown of the company's ownership and share structure, where management and insiders own approximately 20.68% of the company. According to Reuters, Co-Chairman Robert A. Quartermain owns 8.57% of the company with 7.34 million shares, President and CEO Jonathan T. Awde owns 7.21% of the company with 6.18 million shares, and COO Gerald Michael Aberle owns 4.90% of the company.

Reuters reports that institutions own approximately 23.61% of the company, as Fourth Sail Capital LP owns 5.39% of the company with 4.62 million shares, Van Eck Associates Corporation owns 3.54% of the company with 3.04 million shares, BlackRock Institutional Trust Company, NA, owns 3.42% of the company with 2.93 million shares, The Vanguard Group, Inc., owns 3.06% of the company with 2.66 million shares, Fidelity Management & Research Company LLC owns 2.92% of the company with 2.50 million shares, CI Global Asset Management owns 2.83% of the company with 2.43 million shares, and 1832 Asset Management LP owns 2.45% of the company with 2.10 million shares.

According to Reuters, there are 85.7 million shares outstanding with 67.47 million free float traded shares, while the company has a market cap of CA$199.69 million and trades in the 52-week period between CA$2.33 and CA$3.96.

Important Disclosures:

1. Dakota Gold Corp., Kainantu Resources Ltd., StrikePoint Gold Inc., and Western Exploration Inc. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000. In addition, Kainantu Resources Ltd. and Western Exploration Inc. has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000. 
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Dakota Gold Corp., Kainantu Resources Ltd., and Western Exploration Inc.
3. Amanda Duvall wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. 
4. The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

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