[VIDEO ANALYSIS] Analysis on gold mining companies

William:

Okay, the final question for today. Mark from Victoria. "Can you please offer your thoughts on the following resource companies: Newcrest Mining NCM, Evolution Mining EVM, and Silverlake Resources SLR?"

 

 

All three of these happen to be gold miners and therefore they're all leveraged to the gold price and they will all generally track the gold price fairly closely. As long as you have a bullish view on gold, then this is where you should be looking.

 

 

Personally, I do think there is a strong case for gold at the moment. There's a lot of uncertainty in the US with Trump basically being in power and then we have all sorts of things going on in Europe as well, including the start of triguring of the Brexit process and other elections in those other European countries that are ... We're getting these populous parties that are becoming more popular.

 

 

The other kind of bullish catalyst for these stocks, particular Silverlake and Evolution. They were recently added to a higher S&P ASX Index. Evolution was added to the ASX 100 and Silverlake was added to the ASX 300, so that generally means that they can ... Institutional holders are more likely to be able to hold these stocks if they're in a higher index.

 

 

We talked about that in a previous Virtually Live. 

Shannon:

I think it was last week.

 

William:

Yeah. Silverlake, going forward, their mining costs are forecast to fall, so that should improve their margins, but Silverlake is definitely the riskiest of those three. The smallest and the riskiest, but then probably also has the highest upside, so you're going to get biggest bang for your buck in Silverlake.

 

 

Evolution is sort of in between, in the middle, and Newcrest is undoubtedly the largest of the three-

 

Shannon:

And the Blue Chip, I guess, in the gold sector.

 

William:

Yeah, that's right. It's the large, well-diversified company. It has operations in different locations and countries, pays a small dividend, and it has a very long reserve life.

 

 

Given that if you are bullish on gold, then you sort of choose which ones you like depending on-

 

Shannon:

Based on your convictions.

 

William:

Yeah, your convictions, your risk tolerance.

 

Shannon:

I was going to say my gut feeling is, I know this question came in today, that this is a response to the falls yesterday and every market analyst out there who feels there are more falls to come has straight away gone to gold, so if that's what has been a catalyst for your question, then yeah. If you're really confident, then probably go in the higher risk one. If you're only a little bit confident, then maybe just Newcrest.

 

William:

Yep. Okay, that's all for today. Thanks for listening and we'll see you next week.

 

Shannon:

Thank you for listening.

 

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