Gold prices recently rallied to a fresh record of above $2200, and there is potential for further surges as various countries are actively engaging in purchasing gold. Moreover, solid demand for physical gold is driven by its appeal as a safe-haven asset, attracting investors seeking diversification amid underwhelming performances in other asset classes.
Given the backdrop, investors could consider investing in fundamentally sound gold stocks Centerra Gold Inc. (CGAU), Dundee Precious Metals Inc. (DPMLF), and Centamin plc (CELTF) for high-profit potential.
Gold prices have been hitting record highs lately, with the gold contract for April closing above $2,100 per ounce for the first time and the rally shows no signs of abating. Recent moves in prices are primarily attributed to the potential interest rate cuts by the Federal Reserve, as gold prices tend to have an inverse relationship with interest rates.
Moreover, analysts expect strength to last at least into the second half of this year. According to Aakash Doshi, Citi’s North America head of commodities research, prices of gold could surge to $2,300 per ounce in the second half of the year. Also, Macquarie’s strategists project prices to reach new highs during the second half.
Meanwhile, as per UBS analysts, gold is expected to reach a staggering $2,200 per ounce by the year-end.
According to the Mordor Intelligence report, the gold market size is expected to reach 4.42 kilotons in 2024. The market is further projected to exceed 6.32 kilotons by 2029, expanding at a CAGR of 7.4% during the forecast period (2024-2029).
The key factors driving the market’s growth over the forecast period include increasing demand, technological updates, and long-term savings prospects. Further, the wedding market sector in China and India is projected to further flourish and add growth opportunities for the gold market segment in the future.
Talking about the U.S. market, the adaption of gold wedding band and customization from the Western European culture appears to be influencing the gold jewellery demand highly positioning the market for expansion.
Investors’ interest in gold stocks is evident from the Aberdeen Standard Physical Gold Shares ETF (SGOL) 13.2% gains over the past six months.
In light of these encouraging trends, let’s look at the fundamentals of the three best Miners - Gold stocks, beginning with number 3.
Stock #3: Centerra Gold Inc. (CGAU)
Headquartered in Toronto, Canada, CGAU operates as a gold mining company that engages in acquiring, exploring, developing, and operating gold and copper properties globally. The company’s flagship projects include the 100% owned Mount Milligan gold-copper mine in British Columbia, Canada, and the Öksüt Gold Mine in Turkey.
On February 22, 2024, CGAU announced a quarterly dividend of C$0.07 ($0.05) per common share which amounts to around $11.20 million. The quarterly dividend is payable on March 27, 2024, to shareholders of record as of the close of business on March 13, 2024.
CGAU’s annual dividend of $0.21 translates to a yield of 3.57% at the current share price. Its four-year average dividend yield is 2.58%. Moreover, the company’s dividend payouts have increased at a CAGR of 5.9% over the past three years.
On February 14, CGAU and its subsidiary, Thompson Creek Metals Company Inc., entered into an additional agreement with RGLD Gold AG, a subsidiary of Royal Gold, Inc. (RGLD), regarding the Mount Milligan Mine, resulting in a life of mine extension to 2035 and also establishing favorable parameters for potential future mine life extensions.
The additional agreement with RGLD Gold AG will potentially unlock incremental mineral reserves and resources at Mount Milligan for mutual benefit.
For the fourth quarter that ended December 31, 2023, CGAU’s revenue grew 63.2% from the year-ago value to $340 million. The company’s reported earnings from mine operations of $138.10 million indicates growth of 318.5% from the prior year’s quarter. And its free cash flow was $111 million for the quarter.
Furthermore, the company’s adjusted net earnings came in at $61.20 million, or $0.28 per share, compared to an adjusted net loss of $13.70 million, or $0.06 per share, respectively.
According to the 2024 guidance, CGAU expects full-year consolidated gold production between 370,000 and 410,000 ounces, projecting an 11% increase from the midpoint of guidance over last year’s production, and copper production is anticipated between 55 and 65 million pounds.
Analysts expect CGAU’s revenue and EPS for the fiscal year ending December 2024 to grow 4% and 697.5% year-over-year to $1.14 billion and $0.40, respectively. Further, the company topped the consensus revenue estimates in three of the trailing four quarters.
Over the past month, the stock has surged 13.6% and 6.8% over the past six months to close the last trading session at $5.78.
CGAU’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
CGAU has an A grade for Growth and a B for Value and Quality. It is ranked #3 out of 43 stocks in the Miners - Gold industry.
To check other POWR Ratings of CGAU for Momentum, Stability, and Sentiment, click here.
Stock #2: Dundee Precious Metals Inc. (DPMLF)
Based in Toronto, Canada, DPMLF is a gold mining company that engages in acquiring, developing, developing, mining, and processing precious metals. It mainly explores gold, copper, and silver deposits. The company holds a portfolio of projects in Bulgaria, Namibia, Serbia, and Ecuador.
On March 7, 2024, DPMLF entered a definitive share purchase agreement with a subsidiary of Sinomine Resource Group Co. Ltd. for selling its interest in the Tsumeb smelter located in Namibia via the disposition of all the issued and outstanding shares it indirectly holds in Dundee Precious Metals Tsumeb Holding (Pty) Ltd. for consideration of $49 million in cash.
After the sale, DPMLF will be able to emphasize restructuring and simplifying its portfolio and focus on gold mining assets.
On December 18, 2023, DPMLF and Osino Resources Corp. entered a definitive agreement where DPMLF acquired all the issued and outstanding common shares of Osino. The transaction added Osino’s high-quality, long-life Twin Hills open-pit gold project and an extensive exploration portfolio in Namibia to DPMLF’s existing portfolio of assets.
The acquisition strengthens DPMLF’s core competence and unique capabilities, adding a near-term producing asset and positioning DPMLF as a leading intermediate gold producer with exceptional assets and growth profile.
For the fourth quarter that ended December 31, 2023, DPMLF’s revenue increased 23.3% year-over-year to $139.30 million. The company's adjusted net earnings grew 66.7% and 72.2% from the year-ago values to $55.50 million and $0.31 per share, respectively. Its adjusted EBITDA came in at $79.60 million, up 36.5% from the prior year’s quarter.
Also, the company’s free cash flow increased 55.5% year-over-year to $51.80 million.
Analysts expect DPMLF’s revenue for the fiscal year (ending December 2025) to increase 5.2% year-over-year to $525.45 million. Moreover, shares of DPMLF have gained 12.3% over the past month and 19.9% over the past six months to close the last trading session at $7.60.
DPMLF’s POWR Ratings reflect its robust outlook. The stock has an overall rating of A, translating to a Strong Buy in our proprietary rating system.
DPMLF has an A grade for Quality. It also has a B grade for Value. It is ranked #2 among 43 stocks within the same industry.
To see the other ratings of DPMLF for Sentiment, Growth, Momentum, and Stability, click here.
Stock #1: Centamin plc (CELTF)
CELTF is a Saint Helier, Jersey-based company that engages in the exploration, mining, and development of precious metals in Egypt, Burkina Faso, Côte d’Ivoire, Jersey, the United Kingdom, and Australia. Its principal asset is the Sukari Gold Mine project, which covers an area of about 160 square km located in the Eastern Desert of Egypt.
On January 9, 2024, CELTF announced encouraging results of its maiden drill programme on the company’s Eastern Desert Exploration (EDX) landholding in Egypt and furnished an update on the anticipated exploration programme for 2024.
CELTF’s EDX blocks consist of 3,000km of greenfield exploration tenements within Egypt's Nubian Shield - a highly prospective geological belt that has not been explored using modern exploration methods. Further, its 2024 work program includes delineating potential resources and further drill targets in Egypt as part of the growth strategy.
During the fiscal year 2023, CELTF delivered solid performance and achieved 9.5 million hours worked at the Sukari Gold Mine with zero lost time injuries (LTI). Further, during the fourth quarter, its gold production was 128,127 ounces, totaling 450,058 oz produced for 2023.
CELTF’s revenue increased 13% year-over-year to $891.26 million for the fiscal year that ended December 31, 2023. The company’s adjusted EBITDA came in at $398.18 million, up 24.8% from the prior year. Its profit after tax attributable to the parent and EPS was $92.28 million and $7.97, representing an increase of 27% year-over-year, respectively.
Furthermore, the company’s adjusted free cash flow came in at $49 million, compared to a negative $17.55 million in the previous year.
As per business guidance for fiscal 2024, CELTF expects gold production to range between 470,000 to 500,000 oz per annum, weighted evenly between H1:H2 (50:50).
Street expects CELTF’s revenue for the fiscal year 2024 to increase 7.1% year-over-year to $947.65 million. CELTF’s stock has gained 15.9% over the past month and 22.7% over the past six months to close the last trading session at $1.35.
CELTF’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
The stock has a B grade for Value, Growth, Quality, and Stability. Within the Miners - Gold industry, CELTF has topped among 43 stocks.
Click here to access additional ratings of CELTF for Momentum and Sentiment.
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CELTF shares were unchanged in premarket trading Thursday. Year-to-date, CELTF has gained 7.14%, versus a 10.40% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
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