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| Gold Price Bounce Back Expected to Benefit Junior and Mid-Tier Gold Companies |
After five consecutive weeks of gold price losses, a rebound seems to be underway in the precious metal market. Federal Reserve Chair Jerome Powell is expected to deliver two testimonies before Congress this week, with many analysts predicting that this could push gold prices higher. Junior and mid-tier gold companies, such as Torex Gold Resources, Calibre Mining, Lundin Gold, K92 Mining, and Element79 Gold Corp. are expected to benefit from the rally.
Element79 Gold Corp., which has a near-term production project in Peru, recently delivered high-grade assay results from its Lucero Project. The project has been permitted for 350 tpd production, and its local infrastructure and sales outlets make it a potential turnkey operation. The company's flagship asset is its Maverick Springs property in Nevada, which has 3.71 million ounces of gold equivalent Inferred on-site. With Lucero delivering high-grade assay results, the company has terminated its other Peruvian project Machacala to focus solely on Lucero.
Torex Gold Resources Inc., an intermediate gold producer, reported an excellent close to 2022, with full-year production and cost guidance met and liquidity of $622 million. Calibre Mining Corp. achieved record-breaking gold production and revenue in 2022, with plans for 20% production growth in 2023. Lundin Gold Inc. has been producing one of the world's highest-grade operating gold mines at its Fruta del Norte gold mine in southeast Ecuadeor. In February 2023, the company added another 1.58 million ounces of gold to the mine's mineral reserves and more than replaced the mined mineral reserves since the beginning of operations.
Overall, the rebound in gold prices is expected to benefit junior and mid-tier companies more significantly than larger corporations. Gold analysts believe that while gold prices may fluctuate in the short-term, the fundamentals for the yellow metal are strong in the long-term, making gold a safe-haven asset in uncertain economic times.
