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Commodity futures

Gold Equities Remain Undervalued Despite Sector Momentum

Strategic Insights

— 1 min read

Analysts are claiming that gold equities are still undervalued despite the recent sector momentum, with gold miners having earned double the profits of 2011. This year, the Sprott Gold Miners ETF (SGDM) has seen a significant increase of over 70%, confirming the yellow metal's momentum with more upside to come. Despite this, the gold rush has yet to translate into sparking new exploration, as reported by S&P Global Commodity Insights. Several analysts forecast a US$4,000 price target for gold, with the current price above US$3,300 per ounce.

Key Takeaways:

  • The Sprott Gold Miners ETF (SGDM) is up over 70% so far this year, indicating a strong momentum in the gold market.
  • Despite this momentum, gold equities remain undervalued, with analysts claiming that the sector is due for further appreciation.
  • Lake Victoria Gold (TSXV: LVG) (OTCQB: LVGLF) is moving closer to its goal of becoming Tanzania's next gold producer, with commissioning of its processing plant expected to begin within the next four to six weeks.
  • The Nyati Resources' processing plant located on Lake Victoria Gold's Tembo licences is a key milestone in the company's plan to bring its Tembo and Imwelo projects into production.
  • The plant has a fully licensed 120 tonne-per-day (tpd) carbon-in-pulp (CIP) circuit, with a second 500+ tpd line nearing completion, expected to lift total capacity beyond 600 tpd.
  • David Scott, Managing Director Tanzania & Director of Lake Victoria Gold, has expressed confidence in the plant's readiness, stating that it will play a key role in enabling the company's development strategy.
  • Lake Victoria Gold is in the advanced stages of finalizing a binding toll milling agreement with Nyati that would secure exclusive processing rights for Tembo ore, alongside terms for capital participation and profit sharing.

Statistics:

  • Sprott Gold Miners ETF (SGDM) is up over 70% so far this year.
  • The gold price is currently above US$3,300 per ounce.
  • Analysts forecast a US$4,000 price target for gold.
  • Lake Victoria Gold's processing plant has a capacity of 120 tonne-per-day (tpd) carbon-in-pulp (CIP) circuit, with a second 500+ tpd line nearing completion.

Sources:

  • Equity Insider
  • Sprott Gold Miners ETF (SGDM)
  • Lake Victoria Gold (TSXV: LVG) (OTCQB: LVGLF)
  • Nyati Resources
  • S&P Global Commodity Insights
  • David Scott, Managing Director Tanzania & Director of Lake Victoria Gold

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