Fears of financial market contagion in the wake of the Silicon Valley Bank crisis have driven investors to the perceived safe haven store of value that gold offers.
The price of the yellow metals has been driven up by about US$150 per ounce over the past two weeks, trading at US$1,981.80 shortly before noon on Thursday.
Analysts at Stifel GMP have looked at the effect of a $100 per ounce movement in gold, and the corresponding move up in silver, on companies in its coverage, highlighting HighGold Mining Inc (TSX-V:HIGH, OTCQX:HGGOF) and Moneta Gold (TSX:ME, OTCQX:MEAUF) as standout developers.
“We believe HighGold and Moneta Gold all offer excellent value at these levels, and we also highlight Osino, which has a higher valuation, but is well advanced on permitting, project engineering and discussions with potential lenders on a project financing package,” the analysts wrote in a note to clients.
They reiterated their ‘Buy’ rating for HighGold with a price target of C$0.72. The stock is currently trading at about C$0.69.
For standout producers, Stifel’s analysts pointed to Kinross Gold, Dundee Precious Metals and Bear Creek Mining. For royalties, they spotlighted Wheaton Precious Metals.
“Companies that show the most net asset value (NAV) torque to this type of upward price move include Kinross, Bear Creek, and Wheaton Precious Metals,” the analysts wrote.
“These companies stand to see the most dramatic balance sheet improvement with increasing metal prices.”
Contact the author at emily.jarvie@proactiveinvestors.com
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