If there’s one thing to watch when a market is uncertain, it’s gold stocks. More specifically, you’ll likely find more excitement in gold penny stocks as these tend to be volatile. Gold prices hit some of their highest levels in years during July. This could indicate investment sentiment is leaning toward a safe haven mentality in the market. But why?
Well, things like a declining US dollar value in addition to lower interest rates and low treasury yields all impact the gold market in a positive way. Guess what, we’ve got all of these instances and then some. When you think about gold stocks, Barrick Gold and other big-ticket gold companies come to mind.
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But when you’re talking about exponential gains, you need to think small. Historically speaking, junior gold stocks have a tendency to be far more volatile and return big wins in short periods of time. Sound familiar? It should because many of these junior gold stocks are also penny stocks. So, with the climate the way it is, here are a few gold penny stocks to watch heading into the month of August.
Yamana Gold (YRI.TO)
This gold penny stock is up 60% since the first half of June as the “gold tide” has helped boost the sector. Yamana Gold (YRI Stock Report). Aside from that, what’s also helped boost YRI stock has been its recent company performance. Yamana recorded a 7% year-on-year increase in GEO production as well as boosted free cash flow.
What’s more is that Yamana used $385 million of its Chapada sale to pay back its entire balance under a revolving credit line. The remaining $415 million in cash from the sale is being offered to prepay senior notes issued in March 2012 and June 2013. Even though Yamana missed the street estimates, the company saw Raymond James increase the price target in the US from $3.25 to $3.50. But they maintained Yamana at Market Perform.
RosCan Gold Corporation (ROS.V)
Another gold stock that has been on the list of penny stocks this month: RosCan Gold Corporation (ROS.V). The gold company has been trending much more actively during July amid a series of press releases highlighting the company’s expansionary focus. The Canada-based gold exploration company has focused its work in West Africa. Besides having 100%-owned permits within the prolific gold region.
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The rising price of gold has made many gold producers attractive to investors. RosCan recently announced an update to its Mankouke gold zone. In addition, the company also made a new discovery at its Kandiole Project in Western Mali.
Highlights:
| In hole ACMan 19-167 | 5.86 g/t Au over 26.0m (incl. 9.44 g/t Au over 10.0m) |
| In hole ACMan 19-168 | 3.74 g/t Au over 30.0m (incl. 6.73 g/t Au over 6.0 m) |
| In hole DDH 19-04 | 8.63 g/t Au over 10.0m (incl. 11.48 g/t Au over 7.0 m) |
| In hole DDH 19-03 | 6.53 g/t Au over 5.0m (incl. 10.09 g/t Au over 3.0 m) |
| In hole DDH 19-03 | 5.56 g/t Au over 3.0m (incl. 7.14 g/t Au over 2.0 m) |
| In hole DDH 19-08 | 3.45 g/t Au over 10.0m (incl. 6.76 g/t Au over 3.0 m) |
Note: True widths cannot be determined with the information available
“We are continuing to show that we have an excellent new gold discovery at Mankouke that appears to have strike and depth continuity…We are extremely pleased our approach to exploration in this area has been successful. Additional drilling is part of an obvious next step.”
Greg Isenor, President and CEO of Roscan Gold
New Gold Inc. (NGD.TO)
It wasn’t that long ago that New Gold Inc. (NGD Stock Report) was trading below C$1 but after this month, the gold stock has topped C$2.03. July 30 saw share of NGD stock come close to the C$2 mark again as the company has come off of a series of upgrades recently.
Last week, analysts at National Bank raised its price target from C$1.35 to C$2.00. This came on the heels of Canaccord Genuity raising its price target from C$1.10 to C$1.80 per share. The company will be releasing its second quarter results this week. If they are in line with the rest of the sector, this will be something to keep a close eye on. As gold prices rise, some producers are reporting record levels. What will New Gold reveal later this week? We’re just a few days away.
Harmony Gold Mining Co (HMY)
Though this is not a Canadian-based gold penny stock, Harmony Gold Mining (HMY Stock Report) is having a heck of a quarter. Ever since the end of May, Harmony Gold stock price has been flying. At the time, shares traded around USD$1.57. A look at any penny stock chart will show an obvious uptrend to brand new 52-week highs of USD$2.66 this week (so far).
I read a headline from earlier this month, “Will Harmony Gold Mining Continue to Surge Higher?” and laughed. Why? Because we’ve been covering Harmony and other gold stocks in detail for awhile now. Fundamentals are a big catalyst for gold stocks in particular. With the writing seemingly on the wall for a gold bull market, why wouldn’t a gold penny stock like this continue to surge in July?
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Heading into August, we’ll still be watching the sector fundamentals closely. The slightest change could spark a bear market for gold stocks. For now, however, gold penny stocks have been shining bright.
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