Newrange Gold Corp. (TSXV: NRG, OTC: NRGOF)
“Where Exploration INTERSECTS Discovery”
With the recent escalation of tensions between Russia and Ukraine, investors have been flocking to gold in droves in order to protect their savings from the possibility of inflation or even hyperinflation which could result from economic sanctions placed on Russia by the United States and other countries. However, gold coins and bars aren’t the only way to own gold; in fact, shares of precious metal companies such as gold stocks are actually performing even better than traditional physical assets because they are more affordable, more easily traded, and can provide greater leverage over price movements.
Canada’s main stock index opened higher by gold stocks because of the Ukraine war and inflation. Toronto’s S&P/TSX composite index was up 86.24 points, or 0.56 percent, at 15,236.42. Gold stocks contributed as gold prices gained for a third day in New York Thursday and posted their biggest weekly gain since February 2013. Energy stocks were also stronger after crude oil prices climbed further above $100 a barrel, supported by signs that demand is picking up from the U.S.
Recent increased investor and central bank demand have led investment bank Goldman Sachs to revise its target for 2022 gold price, up to $2,500 per ounce.
The analysis of Heraeus Precious Metals showed that when the Federal Reserve has raised interest rates in the past, gold generally rose in price in the following six and twelve months. Rate hikes in the 1980s, the 1990s, the 2000s, and 2010s were all followed by jumps in gold prices in the next six months. Gold jumped by 10-20% for all but one of these cycles: In 1983, the price fell by over 11%, and in 1994, the price slid by 3%.
According to a news report, the US economy will have significant impact from both this market and the invasion-related events. The evidence that the financial market provides are that they are very much influenced by inflation, while it will take the US economy a while to rebuild after all of this damage has been done.
Recently, Goldman Sachs raised its 2022 gold price to $2,500 per ounce, citing investor and central bank demand as well as resilient Asian retail demand in the face of economic and geopolitical uncertainty.
If in the past the Federal Reserve had started to raise interest rates, it led to an increase in the price of gold within the following 6 and 12 months. Starting in 1986, after each rate increase we saw gold prices rise within the next six months, with increases of 10-20%. Exceptions have been in 1983 when gold prices dropped by 11% and in 1994 when prices fell by 3%.
In economically volatile times, when it is unknown what to do with investments, it is common for the price of gold stocks to increase as it’s an easily bought and sold option that people often feel as more of a safe bet. In 2020, for example, the prices dropped dramatically before they had a good turnaround.
In 2020, Barrick Gold dropped to under $18 because of the panic in the markets. It’s same stock rose to $40 in the same year, resulting in a 122% return. This year, the company traded at $23 one point. As of today, it’s traded as high as $31.84 for a 38% improvement from the recent low.
As for Newmont stock, it reached about $45 per share during the 2010-2020 crash, but soon rose to about $90. From there, it’s varied from about $70 to $90 but recently soared to over $99.
Between the beginning of 2020 and February of this year, Agnico Eagle Mines‘ stock rose from about $43 to $105, meaning a 144% increase. The price has since dropped to about $60, but has been steadily rising for the past two months, the latest up over 25%.
In 2020, Franco-Nevada‘s stocks were around $100 per share, which is close to the price they were when the gold boom occurred. It’s around that same number again now. The company’s stock at 2020 was at $26, before climbing to $75, where it registered 188% gains as of this writing. As of right now, it’s at $61 per share.
Founded in 2006, Newrange Gold Corp. (TSXV: NRG) set out to explore and evaluate quality mines in Colombia.
At the beginning of March, the company’s first diamond drill hole on the Primary Target Horizon at the 100% owned North Birch Project revealed a deformation zone exceeding 100 meters in width, as had been originally determined from the geophysics.
The North Birch project is 3,850 hectares of raw land found in the Birch-Uchi greenstone belt north of Red Lake, Ontario, and 12 kilometers from the Springpole deposit that’s owned by First Mining Gold.
Newrange’s President and CEO commented that The first hole is encouraging as it is an important step in confirming our exploration model at North Birch. This exploration model is validated by findings such as both magnetics and LiDAR airborne mapping as well as weak and carbonate-altered bedrock in a sedimentary/quartz environment with sulfur.
Disclaimer: The company described in this article is a customer of NAI Interactive Ltd. This material is for informational purposes only and is not intended as a recommendation or offer or solicitation for the purchase or sale of any securities or financial instruments, or for transactions involving any financial instrument or trading strategy.