This gold and antimony find could be ‘bigger than Texas’

“Guy on Rocks” is a Stockhead series that takes a weekly look at important resource market events. Former geologist and experienced stockbroker Guy Le Page, director and chief executive of Perth-based financial services provider RM Corporate Finance, shares his high-conviction views on the market and his ‘hot stocks to watch’.

Market Breakouts: Gold’s Momentum Reinforces

I’m going to have to apologize for the delay in this week’s column. I suffered from Cristalitis, a rare disease that afflicts people when they opt out of drinking Cristal Champagne, which I consumed in large quantities at the St Regis Hotel in Bali earlier this week.

King Salaman of Saudi Arabia had booked the whole hotel for the week during the G20 and called me for some advice just before he left on November 16th. My recommendation was to go for long oil and short camels…

Speaking of commodities, UBS is getting a bit more bullish on gold (figure 1) and now expects the Federal Reserve to cut rates by 5% to 3.25% by the end of CY 2023 , with major gold miner profits expected to increase by more than 25% for gold producers with NPVs up 9-18%.

The reasoning was based on: (1) their observation that longer-term investors (particularly central banks) were beginning to hoard gold, 2) the proportion of gold holdings to all assets held by institutional investors remains at low levels and (3) strong levels physical gold markets such as India and China have maintained a strong presence in the gold market this year.

With anemic global growth of around 2% next year, UBS can foresee a switch to gold, especially in a weak US dollar environment.

Figure 1: Five-year gold price forecast (Source: UBS, Australian Resources, Gold, 11/18/2022).
Figure 2: 5-year chart of the S&P/TSX Global Base Metals Index (Source: www.googlefinance.com.au).

On the base metals front, they see a reversal in the USD index as a major turning point that has seen the metals market strengthen, although there is significant risk as demand from Europe and the US United is expected to slow further and the impacts of the reopening of China. are not expected to provide significant support to physical markets until 2H23.

Their conclusion is that the next 3-6 months should see the bottom of the metal cycle.

Fresh Ideas: An Update on SXG

Figure 3: SXG 12-month price chart (Source: CMC Markets, November 24, 2022).

As I retreat from a week-long champagne addiction, I thought it was safer to have a quick recap on one of my recent picks rather than roll the dice on something new.

I don’t often mention a title twice in a month, but I couldn’t help but notice the recent announcement of Southern Cross Gold (ASX: SXG) (Figure 3) whose gold-antimony project seems to be growing hour by hour.

The company announced a $16 million fundraising at 58 cents per share last week, which took about the time it took me to respond to the server at St Regis when he asked “Excuse me, sir, do you want more?” »

No wonder bettors are lining up for this with SXG also announcing a monster intersection of 305.8 meters at 2.4 g/t AuEq (1.6 g/t gold and 0.50% antimony) from 319.2 meters downhole at its Sunday project Creek 100% owned in Victoria.

Significantly, the hole also contained 12 high-grade intersections >20 g/t gold, including 5 at over 100 g/t gold. Things are going so well that I heard geologist Lisa Gibbons changed her name by deed to “Life’s Good”.

Who could blame her? It could be bigger than Elvis and Texas…

At RM Corporate Finance, Guy Le Page is involved in a range of corporate initiatives ranging from mergers and acquisitions, IPOs to valuations, consulting and corporate advisory roles.

He was Head of Research at Morgan Stockbroking Limited (Perth) before joining Tolhurst Noall as a corporate adviser in July 1998. Prior to entering the brokerage industry he spent 10 years as a survey geologist. exploration and mining in Australia, Canada and the United States. states. Any views, information or opinions expressed in the interview for this article are solely those of the interviewee and do not represent the views of Stockhead.

Stockhead has not provided, endorsed, or otherwise taken responsibility for the financial product advice contained in this article.

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. Guy Rocks This Discovery Gold Antimony Could Be Great Texas

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