SMALL CAP MOVERS: Junior miners enjoy ride on higher gold price – and Bank of America sees the yellow metal surging to $3,000 an ounce
Gold juniors have rallied this year as punters on AIM have looked at ways of benefiting from a resurgent gold price.
The yellow metal is now trading for just below $1,700 an ounce, up from the sub-$1,450 level seen in March, when markets were hit by the initial shock of the coronavirus crisis.
Bank of America’s bullish forecast sees prices soaring as much as $3,000 per ounce.
Resurgent: Gold juniors have rallied this year as punters on AIM have looked at ways of benefiting from a resurgent gold price
‘There’s plenty to support the case that gold is going to go much higher, not least the simple truth that the world’s central banks are printing a phenomenal amount of money,’ said Mining Capital’s Alastair Ford.
While investors have turned to gold as a haven in times of volatility, miners have enjoyed a higher selling price and lower production costs thanks to the weak oil price, driving margins up.
But analysts say that gold majors have low levels of proven and probable reserves, because capital expenditure for exploration has slumped 61 per cent to $9.4billion in seven years.
That’s why the smaller players are in demand. Australia-focused Greatland Gold, which is a mine developer rather than a digger, has seen its shares skyrocket 398 per cent to 9p in the year to date. Ford reckons the company is top of its class, while research house Hannam & Partners believes stock has further still to go and values it at 12.9p.
Ariana Resources, Scotgold, Galantas Gold and Conroy have also been lifted by the rising tide of a buoyant gold price as have Caledonia Mining and Chaarat.
Looking at the wider market, the AIM All-Share index dipped 0.6 per cent to 809, outperforming the FTSE 100 which fell 1.8 per cent
Among the week’s risers, Mosman Oil and Gas rocketed 83 per cent to 0.1p after agreeing a farm-out with Westmarket Oil & Gas for the EP 155 permit application in Australia.
Peer Touchstone Exploration rolled 22 per cent higher to 37p after telling investors its focus on natural gas shields trading from the volatility of oil price.
In the pharma space, ImmuPharma surged 28 per cent to 17p after a study by US-based Emory University Atlanta provided evidence that the drug maker’s Lupuzor lupus treatment could help to reduce or prevent the occurrence of inflammation seen in coronavirus patients.
Sector-mate Tiziana Life Sciences climbed 23 per cent to 80p after receiving encouraging data from the second phase of trials for its liver cancer treatment Milciclib. The biotech firm is also presenting work at the world’s leading cancer conference, the American Society of Clinical Oncology summit.
Elsewhere, construction services provider Mountfield Group shot up 28 per cent to 1p after winning a £1.2million gig to install raised access flooring at an office in Canary Wharf, London.
Sustainable fuels technology company Velocys accelerated 25 per cent to 3p after its joint development partners British Airways and Shell injected £1million in the Altalto waste-to-fuels project.
Medical products firm Tissue Regenix bobbed 21 per cent higher to 1p after revealing a new generic product line developed in collaboration with an unnamed ‘top 10 global healthcare company.’
Fellow manufacturer AorTech International added 15 per cent to 84p after revealing research and development activities have topped board’s expectations.
In the mining sector, Karelian Diamond Resources advanced 21 per cent to 2p after it was granted three strategic diamond exploration reservations in Finland.
Instead, fellow miner Tertiary Minerals tumbled 21 per cent to 0.2p after analysis at the Pyramid Gold Project in the US came in lower than those from the historic drill hole, though the miner highlighted the target zone is gold-mineralised.
Oil and gas explorer Alba Mineral Resources shares tripped 21 per cent to 0.05p after the company issued 142.5million shares at 0.04p each, as part of a conversion option being exercised by Bergen Global Opportunity Fund.
Learning centres operator Malvern International slipped 18 per cent to 0.4p after non-executive director Ramasamy Jayapal resigned.
Finally, industrial chains maker Renold fell 13 per cent to 6p after appointing Jim Haughey as its new finance director, whose start date still has not been finalised yet.