- It's no secret that COVID-19 has caused investors to flock to gold stocks, seeing the precious metal as a traditional safe haven
- The pandemic and the resulting economic volatility has seen a shift in investment behaviours and a surging interest in gold as a commodity
- Fortunately, ASX-listed gold explorer Renascor Resources (RNU) is poised to capitalise on the yellow metal's growth
- While Renascor is advancing its world-class Siviour Battery Anode Material Project, the small-cap miner also has a foothold in the gold sector
- Renascor's Carnding Project is located in the highly-prolific Gawler Craton region of South Australia which houses historic and multi-million-ounce gold mines
- Carnding has a number of high-priority and drill-ready gold targets dispersed across different prospects
- It seems Renascor Resources is in the right place, at the right time, poised to be a key player in the gold rally
It's no secret that COVID-19 has caused investors to flock to gold stocks, seeing the precious metal as a traditional safe haven.
When economic disruption occurs, investors tend to take less risks and either buy in or hold onto 'safe' choices such gold.
Fortunately, ASX-listed gold explorer Renascor Resources (RNU) is at the forefront of maximising on the growth of the yellow metal.
Gold in 2020
Various events — mostly as a result of COVID-19 — has undoubtedly caused some shifts in investment behaviours.
Generally, investors are reluctant to hold onto gold for too long as it doesn't yield the same interest or return compared to other stocks or bonds. However, the economic disruption sparked by the coronavirus led to reduced confidence in the share market.
In turn, people look for a safer option — something that will always be there and always have a buyer.
In early August, gold broke the US$2000 (roughly A$2757) mark for the first time, reaching US$2070 (roughly A$2853). Specifically, the price gained more than 30 per cent over this year, which makes it one of the best-performing commodities. It even outran the tech-heavy Nasdaq index, which rose by 18 per cent.
"Gold has been the darling of financial markets in 2020," according to Business Insider.
The gold price rallied for 10 weeks straight which is, reportedly, the longest stretch of gains since 2002.
However, COVID-19 isn't the only factor for the spiked interest in the precious metal. Geopolitical angst between the U.S. and China, unemployment rates, a resurgence of coronavirus cases, as well as economic stimulus packages have all pointed to increased interest in the tangible asset.
The surging interest in gold as a metal has led gold stocks, like Renascor Resources, to hone in on potential opportunities for further exploration growth and even production. Pleasingly, the small-cap already has its foot in the door.
"The recent rise in gold prices, coupled with a strengthened U.S. dollar, has made Australian gold exploration projects attractive, provided there is a clear path to benefiting from the near historic highs we are seeing in the Australian gold price," Renascor Resources Managing Director David Christensen said.
Who is Renascor Resources?
Renascor Resources is an Australian mining and exploration company with a focus on two projects in South Australia.
The first is the Siviour Battery Anode Material Project, which includes one of the world's largest graphite resources. This advanced project is positioning Renascor as a key player in the rising global electric vehicle and battery sectors.
While Renascor is maintaining its focus on its wholly-owned graphite project, the last few months has seen it put an increasing amount of effort into exploring and expanding its Carnding Gold Project.
The wholly-owned Carnding Project is located in South Australia's Gawler Craton. This prospective region is the oldest and largest geological province in South Australia — covering around 440,000 square kilometres of the state.
Gawler Craton hosts a significant number of gold deposits including the Prominent Hill copper-gold mine, the Challenger underground mine and Barton Gold's up-and-coming Tunkilla and Tarcoola gold operations. Conveniently, Tarcoola is located only 20 kilometres from Renascor's project area.
The gold-rich region is said to host over 27 per cent of Australia's known gold resources and small-cap miners, such as Renascor and Barton, are seizing their opportunity.
"South Australia’s Central Gawler Craton, which is experiencing increasing gold exploration, is clearly benefiting from the strong Australian gold value in large part because the area offers great potential for shallow, high-grade gold deposits that can be quickly developed to benefit from the current gold trend," David stated.
The attractive thing about the Carnding Project is not only its location, but the fact that it contains a number of high-priority and drill-ready gold targets. These include the newly-identified Soyuz, Mir and Sunshine prospects.
Importantly, the Soyuz prospect returned shallow, high-grade results including seven metres at 5.14g/t gold from 26 metres to end of hole, including two metres at 16.42g/t gold from 30 metres.
"With limited previous drilling having intersected up to 16g/t, the project has ample potential to prove up a value gold resource in our upcoming drill program," he added.
The gold explorer will soon begin soil sampling, an induced polarisation survey and up to 2000 metres of drilling to target the Soyuz prospect and existing anomalies.
Renascor currently has a strong cash position, with $5.2 million in the bank as of September 30, 2020, positioning it well to fund exploration efforts.
It seems Renascor Resources is in the right place, at the right time, poised to be a key player in the gold rally.