Highland Gold Mining Ld Investors - HGM

Highland Gold Mining Ld Investors - HGM

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Stock Name Stock Symbol Market Stock Type Stock ISIN Stock Description
Highland Gold Mining Ld HGM London Ordinary Share GB0032360173 ORD 0.1P
  Price Change Price Change % Stock Price Last Trade
0.00 0.0% 299.60 00:00:00
Open Price Low Price High Price Close Price Previous Close
299.60 299.60
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davidosh: The Mello Team has created Mello Tuesday as an evening for sector and asset coverage and our very first will be dedicated to investing in GOLD. We will look at Gold as an asset and how to invest in it covering everything from buying gold coins and bars through to stakes in gold producers paying regular dividends. We will also cover ETFs, gold indexes, gold exploration & mining companies and investment funds, featuring a number of presentations. The webinar will provide a broad range with a panel session to cover all these options and assessing the risks and opportunities now open to investors. We have a fantastic line up for our investors to include the listed companies as follows.... Wheaton Precious Metals Serabi Gold Golden Prospect Adriatic Metals The evening will include the latest insights and analysis from investment managers, research professionals, analysts and experienced investors. Https://melloevents.com/upcoming-event/mellotuesday-24th-november/ To obtain a discounted ticket for just £5 please enter the code MTGOLD
loganair: The price of gold has been rallying in recent weeks, having smashed a decade high of $1,800 this month. Analysts at Citigroup say bullish factors building in the gold market are pushing for another record. According to the analysts, the metal is benefiting from loose monetary policy, low real yields, record inflows into exchange-traded funds and increased asset allocation. They expect the precious metal to climb to an all-time high in the next six to nine months, with a 30 percent probability it’ll top $2,000 an ounce in the next three to five months. “Nominal gold prices have already posted fresh records in every other G10 and major emerging market currency this year,” the analysts said, as quoted by Bloomberg. “It is only a matter of time for fresh” highs in US dollars, they said, adding that silver will also enjoy a price surge. The Covid-19 pandemic has been driving investor appetite for traditional safe-haven assets, with global investment demand soaring to multi-year highs. Economists have been predicting that bullion will top its longstanding record of $1,920 an ounce amid global economic recovery uncertainty. Gold was trading at $1,811.04 per ounce on Monday, while spot silver gained 0.6 percent to $19.65 per ounce. Citi sees silver, which touched a three-year high, rising to $25 per ounce in the next six to 12 months, with potential for $30 based on the bank’s bull case, additionally supported by a recovery in global economic activity. Both metals are after six straight weeks of gains as investors consider talks on more stimulus in key global economies.
investor73: ft.com Gold miners glitter as spot price nears 9-year high. Gold miners’ share prices are soaring with the value of the precious metal, while increased dividends are helping push these stocks higher still. The spot price of gold has risen 17 per cent so far this year and is closing in on $1,800 an ounce for the first time in nine years. The commodity, commonly treated as a reliable store of value by investors, has benefited from nerves over the spread of Covid-19 and the outlook for global trade — and rock-bottom yields available on other haven assets. Gold stocks have done even better, however, up 23 per cent this year as measured by the NYSE Arca Gold Miners index. Standout performers include Canada’s Kinross Gold and Barrick Gold, and US-based Newmont Corporation, all up at least 40 per cent so far in 2020. The primary market is also vibrant. Recent share sales by South Africa’s Harmony Gold and Polymetal, a London-listed miner with assets in Russia and Kazakhstan, were completed in double-quick time, with the books covered in 20 minutes, according to bankers working on the deals. “Macroeconomics is playing a part: gold has reasserted its status as a safe asset,” said one banker involved in the $200m Harmony deal. Given the favourable backdrop for gold — safe instruments such as US government bonds are effectively paying investors a negative return — analysts and sector specialists reckon gold and gold-related equities have further to run. “With swelling central bank balance sheets, and rates in the US and most major developed economies close to or below zero, we see the macro backdrop as supportive,” said James Bell, analyst at RBC Capital Markets, in a recent report. At the same time, big producers have also started to crank up returns to shareholders. The total per-share dividend of the five biggest gold miners has risen from $1.50 in 2015 to $3.20 in 2019, according to UK-based asset manager Ninety One. Bullish fund managers think there is further to go. George Cheveley, a fund manager at Ninety One, said the outperformance “isn’t substantial when you consider the tailwind” from lower oil prices and weaker currencies in producer countries, compared with markets where the metal is sold. “We would expect them to do even better and deliver strong returns.” Last year, “all-in” margins — which include exploration and other general and administrative costs — for a group of big gold producers tracked by RBC exceeded 10 per cent for the first time since 2012. Mr Bell thinks the miners can achieve 20 per cent this year on this metric. The banker on the Harmony deal said investors were attracted by the stock’s higher “leverage̶1; to rising prices than can be gained from gold-tracking exchange traded funds. The idea is that a higher gold price on a fixed cost base can drive up corporate profits quickly.
investor73: New gold rush is on as investors and central banks hoover up bullion. https://www.telegraph.co.uk/business/2020/07/06/new-gold-rush-investors-central-banks-hoover-bullion/
loganair: This is a bear market rally, say two-thirds of fund managers: A majority of professional investors think the stock market rally from lows has gone too far, with a second coronavirus spike topping worries. Two-thirds of professional investors believe the rally of global stock markets since March lows is set for a reversal, with a second wave of coronavirus infections topping their list of concerns. 68% of global fund managers believed we were in the middle of a ‘bear market rally’ – a marked but unsustainable bounce following a market crash that is not backed up by economic fundamentals. For more than half of those, 52%, a second spike of coronavirus infections was now the biggest ‘tail risk’ facing investors, while permanently high unemployment or a break-up of the European Union came in second and third on the worries list, at 15% and 11% respectively.
loganair: Gold has extended its rally with prices reaching their highest level in more than seven years on investor concerns that the Covid-19 pandemic will have a devastating effect on the global economy. Futures are nearing $1,800 an ounce after trading in the $1,400s less than four weeks ago. Prices are now at their highest level since October 2012. Spot gold was up more than five percent on Tuesday at $1,718 an ounce. Gold appears to have “solid, big-picture, bullish fundamentals in place as deteriorating economic sentiment globally suggests even larger waves of government support will be seen in China, India, Europe and the US,” analysts at Zaner Metals told the Market Watch. Global holdings in bullion-backed, exchange-traded funds have ballooned to record levels on rising demand, with investors seeking additional portfolio protection. On Monday, volumes in SPDR Gold Shares (the largest such fund) skyrocketed above 1,000 tons to the highest volume since mid-2013. “Gold’s biggest stumbles during this crisis have been because investors were on a search for cash liquidity to cover losses and margin calls elsewhere, not because their attitude toward gold shifted,” said Christopher Louney, analyst at RBC Capital Markets. “Even as markets improve, whether temporarily or not, and investors come back, we think gold will also absorb inflows alongside other asset classes. Market participants are aware of the risks out there, and an asset like gold that we have long recommended as a risk overlay stands to receive ongoing support, and we think the firmest support is now at our high scenario,” he added. Some experts point out that the gold market’s future looks bright at a time of unprecedented uncertainty. “We would expect to see prices over $2,000 by sometime early next year. That is not a surprise, fundamentally either, in the current environment,” Peter Grosskopf, chief executive officer at Sprott said.
loganair: MoneyWeek - Here’s the problem in a nutshell: the global economy is heavily indebted. Companies have loaded up on debt because it’s cheap. Unlike the last financial crisis, the debt now is in “proper” companies rather than the banking sector. The risk, as John Plender puts it in an article for the FT that Edwards references, is that the coronavirus batters earnings and makes it harder for companies to service their debt. In turn, investors would suddenly take fright when they wake up to just how low quality a lot of this debt is. That’ll drive up borrowing costs and make it even harder for troubled companies to make their interest payments. “In effect, the coronavirus raises the extraordinary prospect of a credit crunch in a world of ultra-low and negative interest rates,” says Plender. The underlying issue is that the entire financial market is structurally short volatility, and that’s the fault of central banks, led by the Federal Reserve. What does “structurally short volatility" mean? It means that because central banks always step in to prop up markets when they fall, investors have decided that there won’t be another crisis. So they take bigger risks – because why wouldn’t you, when there’s always the Greenspan safety net to catch you? So investors are very long complacency, and very short black swans. And when you get yourself into that position, it doesn’t take much of a black swan – maybe a black cygnet even – to swoop down and knock over your carefully constructed portfolio.
loganair: “It’s bloodshed,” Commerzbank AG analyst Carsten Fritsch said on Friday. “It first started with forced selling from equity investors who also sold their gold positions to cover their losses in equities and also to cover margin calls. Gold investors don’t want to sell but are forced to cover the losses in other asset classes.” As the global asset sell-off heats up, investors are dumping gold to cover margin calls. The shin metal also tanked as concern mounted over how the coronavirus outbreak will upset demand in China for everything from crude to copper to gold. China is among the biggest consumers of bullion. “The possibility that China may be using less is hurting commodity accounts and therefore you’re going to see margin calls,” said George Gero, a managing director at RBC Wealth Management.
dsrush: Perhaps get my balls nailed to the floor for this. But, uknighted, here is the full article that you mentioned... Gold stocks seem to be very much on the radar at the moment, with the price of the yellow metal looking very strong against a back-drop of worldwide concerns over coronavirus and investors looking for a safe haven. With interest rates also being so low at the moment, I think that is adding to the attraction of gold as it is hard for investors to find something that is both seen as a safe haven and also where the value of their investment has a chance of appreciating. Even before coronavirus really started to be seen as a major issue, there were signs that all was not well with the world economy, and as a result gold had been showing strength. But now that is even more the case as the chances of a serious knock-on effect to the world supply chain from the virus looks to be very likely, and it would appear that the markets are grossly underestimating this with barely a blip – even the big drops yesterday weren’t really that significant, other than from a headline point of view, given that the indices had been trading at around all-time highs anyway. Many gold stocks have already enjoyed decent rises, but I would argue that it isn’t too late to buy in spite of that, as high gold prices look likely to remain, and the metal could even rise further if the world economy really does start to take a serious hit. There are a number of gold stocks which I watch closely and like, but one of my favourites has to be Highland Gold (HGM), where I hold a few shares myself and have done for some time. Not only do I want to invest in a company which is strong from a production perspective, but I also want one where there is good potential for further growth in the future. I wrote about this company at the end of 2018 and what great potential it had – so much so that I convinced myself to buy some soon afterwards! – and at the time the share price was around 140p, with a market cap of £455 million. Since then it has certainly prospered as gold has risen, and now trades at around 227p and a market cap of £828 million, with an extra 40 million odd shares in issue. Its four mines in Russia are producing substantial amounts of gold and the last quarter in 2019 was very good with more than 83,000 ounces, which helped it to just exceed the upper end of full year guidance, at a fraction over 300,000 ounces for the year. This year quite a bit of work will be going on, especially at its Kekura project where initial mining got underway late last year, plus at Belaya Gora and Nova, where it is expecting to spend around $210 million overall on Capex this year. Even without growth in output for this year though it should still perform well – not to mention being in a much better position for growth in the coming years – as the gold price is now significantly above the average of $1,395/oz achieved throughout 2019. During H1 2019, which was the last set of financial results, the company achieved a net profit of more than $45 million, with an average gold price of $1,308/oz, and all-in sustaining costs of $778/oz. It is carrying some debt on its balance sheet, as you would expect with a miner of this size, and at the end of June 2019 net debt stood at $216 million, via various loans, and stood at around 1.29 on a net debt/EBITDA ratio and well within range set by the company. In terms of funding the Capex needed for the work throughout this year, I would expect that to come from loans, as well as the strong free cash flow generated from its operations, and I can’t see any problem with it managing to get the funding that it needs. The company also pays a dividend, which totalled 10p per share for 2019, and although you aren’t going to get rich from it, a yield of 4.4% isn’t too bad for a miner of this size. Looking at its reserves and resources, the last report on these was at the end of 2018 so is dated, but at that time it had proven and probable reserves of nearly 5.8 million ounces, along with measured and indicated resources of over 16 million ounces, so it is easy to see the potential for sustainability and growth longer term as further work is carried out – Kekura for instance has in excess of 2 million ounces of proven and probable reserves. There are of course also some risks, and aside from any political risk – which despite operating in Russia I would class as low given the history of the company there – the biggest risk is without doubt the future gold price, especially given the amount that the company is spending on development of its assets in the near term. But if we look at how it was performing at much lower average gold prices, we can see that it is insulated to some degree as it has performed well at those lower prices in the past, and its AISC is relatively low. I can still see value at the current share price, and along with other gold miners it will provide a safe haven for investors if the markets really do start to take a serious tumble. Given the current turmoil it would certainly seem prudent to have at least some gold exposure in your portfolio via a mid-sized producer with growth potential.
loganair: MoneyWeek - Gold is at its highest level in years – here’s how to invest: Gold's rise at a time when the dollar is unnervingly strong isn't unheard of – but it is curious. John Stepek explains what's going on, and what it means for investors. Gold is rising against a strong US dollar: Gold is now at its highest level in seven years, trading at above $1,600 an ounce. This is happening at a time when the US dollar is also unnervingly strong. This is not unheard of. It’s perfectly feasible for gold and the dollar to go up at the same time. However, it’s not something investors have been used to seeing recently, so it’s seen as odd. So what’s going on? And how can you get yourself some gold Gold is the only currency in the world without a central bank behind it: Gold’s rise at a time of US dollar strength, indicates two main things. Firstly, it suggests that, despite surging stockmarkets, investors are rattled. Gold is seen as a “safe haven”. Just to be clear, that does not mean that gold is “safe” – the price still goes up and down and you can lose money fast. It means that investors as a group see it as somewhere to put your money when the world is looking like a risky place. Other “safe havens” include the US dollar (going up) and US government debt, or Treasuries (also going up – ie, yields are going down). The Japanese yen is usually deemed a safe haven but it’s weakening right now because it’s very tied to China, which is the current epicentre of economic concern. Secondly, the apparent conundrum of gold rising even when the dollar is rising is less surprising when you look at its performance against every other currency in the world. In lots of major currencies, gold is now at or near all-time highs, including the Australian and Canadian dollars, and our own British pound. The simplest way to think about this is probably to view gold as another currency. It’s a currency – unlike all the paper currencies – that can’t be printed. And it’s a currency – that unlike all the paper currencies – doesn’t rely on the integrity of any institution for its ongoing value or, in extremis, continued existence. And when you look at it like that, the rise – even against the strong dollar – makes sense. Pretty much every central bank in the world is currently biased towards lowering interest rates or printing money. Therefore it’s no surprise that every currency in the world is falling against the one that isn’t backed by a central bank. That doesn’t look like changing any time soon. So if you want to get exposure to gold, how do you go about it? Betting on rising gold prices: We’ve always said you should have some gold in your portfolio, through thick and thin. That’s because it’s a good diversifier – it won’t always move in the same direction as equities or bonds. The question now is, if you want to bet on gold because you think it’s going to continue higher (rather than simply owning it as part of your permanent asset allocation), then how do you play it? You can buy physical gold, of course. There are lots of ways to do so. You can buy bullion or coins and store them securely, whether in a safe or with one of the bullion companies who’ll store it for you. Or you can invest via an exchange-traded fund which will give you exposure to the gold price (opt for one that’s backed by physical gold). Another option – and one which is both riskier but also might have more potential for decent returns from here – is to look at gold mining stocks. Gold miners proved to be generally terrible investments during the last gold boom. They were badly run, and as a result, you’d have made as much money by simply owning gold on the way up, and you’d have lost far, far less during gold’s post-2011 bear market than you did by owning the miners. This has left a pall of investor revulsion and suspicion hanging over the sector that even now does not appear to be fully lifted. Gold is an investment that attracts a fair bit of derision at the best of times. And in the aftermath of the gold bust, gold miners were roundly condemned as one of the most stupid investments of all time. If there’s one thing that people hate even more than losing money, it’s being made to feel stupid. Hence the revulsion around the sector. That of course, leaves psychological room for the miners to play “catch-up̶1; with the gold price. That might happen in earnest later this year – as Eoin Treacy of FullerTreacyMoney points out, “gold miners are among a small number of sectors almost guaranteed to have earnings beats over coming quarters.” If you do decide to invest in gold miners, bear in mind that they are risky, even by the standards of equities. This is not the same as investing in gold. Do not consider this as part of your gold asset allocation – think of it as part of your equity asset allocation. Unless you have the knowledge to do so (in which case you probably don’t need me to be telling you all this) I would suggest you opt for an ETF or a fund investing in gold miners. That way you diversify your risk. Yes, you won’t find any six-month 10-baggers that way, but at the same time, nor will you be landed with any 1-day straight-to-zero shots.
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