Gold juniors have rallied this year as punters on AIM have looked at ways of benefiting from a resurgent gold price.
The yellow metal is now trading at just below US$1,700 an ounce, up from the sub-US$1,450 level seen in March when markets were hit by the initial shock of the coronavirus crisis.
Bank of America’s bullish gold forecast sees prices soaring to as much as US$3,000 per ounce.
“There’s plenty to support the case that gold is going to go much higher, not least the simple truth that the world’s central banks are printing a phenomenal amount of money,” said Mining Capital’s Alastair Ford.
While investors have turned to gold as a haven in times of volatility, miners have enjoyed a higher selling price and lower production costs thanks to the weak oil price, driving margins up.
But analysts say that gold majors have low levels of proven and probable reserves, because capital expenditure for exploration has slumped by 61% to US$9.4bn in seven years.
That’s why the smaller players are in demand. Australia-focused Greatland Gold PLC (LON:GGP), which is a mine developer rather than a digger, has seen its shares skyrocket 398% to 9p in the year to date. Ford reckons the company is top of its class, while research house Hannam & Partners believes the stock has further still to go and values it at 12.9p.
Ariana Resources PLC (LON:AAU), Scotgold Resources Limited (LON:SGZ), Galantas Gold Corp (LON:GAL) and Conroy Gold and Natural Resources (LON:CGNR) have also all been lifted by the rising tide of a buoyant gold price as have Caledonia Mining Corporation PLC (CMCL) and Chaarat Gold Holdings Ltd (LON:CGH).
Looking at the wider market, the AIM All-Share index dipped 0.6% to 809 over the last week, outperforming the FTSE 100 which fell 1.8%.
Among the week’s risers, Mosman Oil and Gas Limited (LON:MSMN) rocketed 83% higher to 0.1p after agreeing a farm-out deal with Westmarket Oil & Gas for the EP 155 permit application in Australia.
Peer Touchstone Exploration PLC (LON:TXP) rolled 22% higher to 37p after telling investors its focus on natural gas shields its trading from the volatility of oil prices.
In the pharma space, ImmuPharma PLC (LON:IMM) surged by 28% to 17p after a study by US-based Emory University Atlanta provided evidence that the drug maker’s Lupuzor lupus treatment could help to reduce or prevent the occurrence of inflammation seen in coronavirus patients.
Sector-mate Tiziana Life Sciences PLC (LON:TILS) climbed 23% higher to 80p after receiving encouraging data from the second phase of trials for its liver cancer treatment Milciclib. The biotech firm is also presenting work at the world’s leading cancer conference, the American Society of Clinical Oncology summit.
Sustainable fuels technology company Velocys PLC (LON:VLS) accelerated by 25% to 3p after its joint development partners British Airways and Shell injected £1mln in to the Altalto waste-to-fuels project.
Medical products firm Tissue Regenix PLC (LON:TRX) bobbed 21% higher to 1p after revealing a new generic product line developed in collaboration with an unnamed “top 10 global healthcare company”.
But on the downside, fellow miner Tertiary Minerals PLC (LON:TYM) tumbled by 21% to 0.2p after analysis at the Pyramid Gold Project in the US came in lower than those from the historic drill hole, though the miner pointed ou that its target zone is gold-mineralised.
Oil and gas explorer Alba Mineral Resources PLC (LON:ALBA) shares also tripped up by 21% to 0.05p after the company issued 142.5mln shares at 0.04p each as part of a conversion option being exercised by Bergen Global Opportunity Fund.