Gold may have set a new record, but the advance of precious metals is far from over.
The price of gold shoots through the roof. One of the reasons for this is the fear of inflation. The U.S. government pumped billions of dollars into the system after the financial crisis, even more, to curb the corona crisis, and the end doesn’t seem to be in sight yet.
Geopolitical tensions and low-interest rates are also causing many investors to resort to precious metal.
Seven interesting equities
According to USNews, Bank of America still sees good opportunities for investors to take advantage of the rise in gold prices. The merchant bank tipped seven mining shares.
1. Agnico Eagle Mines
This Canadian gold mining company mined approximately 1.78 million ounces of gold in 2019. Production is expected to reach 2 million ounces this year.
If the gold price rises further, Agnico’s margins will increase.
Bank of America has a target price for this share of 72 dollars.
2. Barrick Gold
This gold mining company is also located in Canada. The gold production of this group is expected to reach between 4.6 and 5 million ounces this year. Furthermore, Barrick is mining copper.
According to Bank of America, the company has robust cash flow and investor-friendly capital allocation.
Bank of America has an exchange rate target of 34 dollars.
Also, read the column by Martine Hafkamp: Gold in the spotlight again.
B2Gold owns gold mines in the Philippines, Namibia, and Mali. High gold prices and rising sales give the margins a boost.
According to Bank of America, this group’s mining production has not been affected by the corona pandemic so far. B2Gold expects to produce more than 1 million ounces this year.
The exchange rate target is 6.55 dollars.
4. Eldorado Gold
This group owns mines in Turkey, Greece, and Brazil. This year’s earnings per share forecast exceed expectations.
According to Bank of America, the strong performance and the production value are not yet reflected in the share price, which has a 12 dollar target.
The Canadian Iamgold Corp. mines gold in Canada, Burkina Faso, and Suriname. It also plans to continue the Côté Gold project in Canada, which will increase production and net asset value by 50%.
The company has already hedged 90% of its oil exposure. In 2023, free cash flow will amount to 750 million dollars.
The exchange rate target is 5.60 U.S. dollars.
6. Kirkland Lake Gold
This also Canadian company owns important mines in Canada and Australia. At the beginning of 2020, Kirkland took over the Detour Lake mine.
The recent rise in gold prices has created additional profit potential for Kirkland as investors anticipate higher margins.
Bank of America has set a price target of $57 for this share.
The world’s largest gold producer is Newmont Corp, which should not be missing from this list. The pipeline is richly filled with new projects. According to Bank of America, the free cash flow is robust, and the balance sheet stable. Management has a sustainable long-term focus.
Bank of America predicts growth in earnings per share from $2.10 to $4.06 in 2021. This results in an expected price/earnings ratio of 15.5.
Bank of America’s price target is 82 dollars.