With the rickety trading at Wall Street seen again and Dow Jones Industrial Average tanking over 1,032 points overnight in an attempt to complete the full correction, Australian share market also witnessed a numbness in trading; and taking advantage of the scenario again, many investors pounced on gold stocks.

Evolution Mining Limited (ASX: EVN)

Potential Drilling Results: EVN’s stock rose about 4.5% on February 09, 2018 with gold price movement and some positive updates. Emmerson Resources Limited has announced the results of recent drilling from two of its five projects. A recent drilling campaign at the Kadungle project in NSW was identified to be potential for both deeper copper-gold and also epithermal gold at the Trig prospect. The last drill hole at Trig intersected multiple epithermal veins which corresponded with boulders at surface that contained extensive quartz-hematite veins. Drilling at the Mt Leadley prospect also intersected further copper and gold. The other two drill holes at Mt Leadley also intersected strong alteration and anomalous gold which combined with the recent geophysics and the main higher-grade portion of the system is yet to be tested. Emmerson has met all the terms of the Stage 1 Earn-in to acquire a 60% share of the Kadungle project. This recent round of drilling is part of the next Stage 2 Earn-in of $200,000 for 80% of the project. Pursuant to the Farm-in agreement entered with EVN, the latter has met the Stage 1 Earn-in obligation of $15 million to earn a 65% interest. There is a further option to spend $10 million over two years following the Stage 1 Farm-in, which will allow EVN to earn an additional 10%.

End of last month, the group provided December 2017 quarterly report highlighting 15,015m of drilling completed across its four projects (including White Foil, Frog's Leg, Premier and Emu prospects). Net bank debt has been reduced by 32% to A$231.5m and unaudited gearing reduced to 9.5% as at 31 December 2017 while cash balance improved significantly. The group expects to achieve FY18 production above the mid-point of 750,000 – 805,000 ounces. Meanwhile, EVN stock has risen 8.10% in three months as on February 08, 2018 and is trading at a high level. Based on the foregoing, we give an “Expensive” recommendation on the stock at the current price of $2.79
 

Resolute Mining Limited (ASX: RSG)

Growing business base: Up 3.7% on February 09, 2018, Resolute controls an 80 km strike length of the 10Moz Syama shear zone. Majority of exploration to date has been focussed on shallow oxide open pit orebodies. Resolute has mined more than 8 million ounces from 9 gold mines in Australia and Africa. Its main focus is on seeking the value for generating acquisition opportunities. During FY 17, total 92,004 of Gold oz was produced whereas FY 18 production guidance of 80,000 of gold oz is expected for Ravenswood Gold Mine while group’s total gold production guidance is 300,000oz for FY18 against 330koz achieved in FY17. A rapid underground development was also seen as Syama Underground was ahead of its schedule. It advanced more than 8 km and semi-automated drilling with Sandvik DD422i allowed longer rounds and more rapid development with less over-break. A 2% of annual gold production has been offered in gold or cash as dividend to its shareholders. Recently, ICM Global Funds and Van Eck became the substantial holders of RSG by holding 19.99% and 9.97% of its shares, respectively. Cash, bullion and investment balance was US$158 million, and the Debt balance was US$8 million as on 31 January 2018. Given the potential and trading level, we put a “Buy” recommendation at the current price of $1.10
 

FY18 Year to date Progress (Source: Company Reports)

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.