Media Release
“Quality ASX-listed gold companies are undervalued by up to 50%, and for some junior explorers in the sector the figure may be 100% or more”, according to Rod Holden, managing director of Gold Report Australia (GRA), a private investment company specialising in the Australian gold sector since 2001.
GRA expects to see a massive re-rating of Australian gold companies, starting in Q4 2006, as investor interest returns to the sector on the back of renewed buying of bullion by funds, which GRA believes will push the price to new levels – similar to the highs of Q2 2006.
“Based on our assessments of gold price movements over the last four years, technically, once the gold spot price re-breaks US$600/oz and stays above US$618/oz we should see a new high of US$787/oz reached by the end of this calendar year, and this may be only the beginning,” says GRA.
GRA believes that fund managers entering the market again this quarter, similar to Q2, could easily see US$1000/oz broken for the first time signalling massive demand for shares in both producers and explorers as retail investors scramble to take advantage of rising profit margins and exploration success.
“Of the 442 ASX listed resource companies that we watch, 365 have gold projects and we believe the ones with quality projects, a good management team and board, will be massively re-rated over the next three to twelve months, based on the market cycle and where these companies sit within that cycle.”
GRA also expects to see further consolidation of the Australian gold sector over the next year as the larger producers struggle to maintain their resource base due to the lack of large-scale exploration in the past 10 years.
Apart from being an investment company Gold Report Australia operate a research and information system specific to the ASX-listed gold sector, available to the public through its website at www.goldreport.com.au
