Gold miners were seen to be on the upswing with the start of the week, as gold touched a four-month high level last Friday with the fall of US dollar under prevailing macro environment and US President Donald Trump waiving nuclear sanctions against Iran.
 

Evolution Mining Ltd

Allocation of additional funds: Evolution Mining Ltd (ASX: EVN) in year to date FY18, has reported for good cash generation at the back of reduced gearing. The group had initially planned to invest approximately A$50.0 million. However, with the success of drill programs at Cowal E41 West and the Cracow Imperial Zone, the additional funds in the order of A$5.0 - A$10.0 million are expected to be allocated for the discoveries. The other major focus area for the year ahead is on drill programs at the highly prospective Mungari Regional tenement package, where the company got encouraging results. Therefore, EVN stock has risen 13.26% in three months as on January 12, 2018 but it is trading at a slightly high level, specially, with the recent rise of 6.64% on January 15, 2018 owing to the rise in gold stocks. We believe that the stock is “Expensive” at the current price of $2.73
 

FY18 Guidance (Source: Company Reports)
 

Resolute Mining Ltd

Implements new A$ gold hedge: Up 5.85% on January 15, 2018, Resolute Mining Ltd (ASX: RSG) had taken advantage of the recent increase in the A$ gold price to form a gold hedge position to support the Ravenswood Expansion Project. The company had forward sold 72,000 ounces of gold at an average price of A$1,715 per ounce with scheduled monthly deliveries of 4,000 ounces between December 2017 and May 2019. RSG has received an average gold price in the forward sales contracts of A$1,715 per ounce, which is a significant premium above RSG’s budgeted gold price of A$1,600 per ounce. Overall, combined with RSG’s existing US$ forward contracts, the group’s total hedged position is approximately 30% of expected gold production over the next 18 months. The group also seems to benefit from the partnership with Perth Mint. Meanwhile, RSG stock has risen 3.26% in three months as on January 12, 2018 and is trading at a reasonable level. Based on the foregoing, we give a “Buy” recommendation on the stock at the current price of $1.175

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