There has been some fuss about the gold price lately because it just had its worst quarter in a decade.
There’s hardly any panic in Kalgoorlie. The Australian gold price remains at around $6,000 per ounce.
Most gold producers can get it to market at costs lower than half that.
It’s July.
That means the release of quarterly production reports and updates from the listed Australian mining companies.
Gold stocks are high interest right now because the sector remains profitable despite the gold price being under pressure last quarter.
Two companies that shared their reports last week were Catalyst Metals (ASX:CYL) and Genesis Minerals (ASX:GMD).
Here are some of the numbers.
CYL has a market cap of $1.6 billion. In the last quarter it produced 31,800 ounces of gold. That took its annual production to 104,000. That put it within its previous guidance of 100,000–110,000.
CYL had four mines operating in the last quarter and has another three in development. Management at the company says key operating metrics are all positive and possibly even prospective to improve.
The market responded positively and the stock jumped in Friday’s trade:
Genesis Minerals, a much bigger miner, has a $7.6 billion market cap. It also hit its annual production guidance of 285,400 ounces. Free cash flow for the year is now at $258 million (before costs outside of production).
GMD raised its forecast spending on exploration. The market was happy with that release last week, too:
Now, there is a major surprise today: there is a bidding war for Vault Minerals (ASX:VAU).
Back in May, Regis Resources (ASX:RRL) and Vault announced a proposal to merge and create the third-largest gold producer on the ASX.
The boards of both companies backed the deal.
That brings the story to today. The Australian Financial Review reports:
“Vault Minerals has received a binding takeover proposal from Genesis Minerals valuing the gold miner at about $5.6 billion, prompting the board to declare it a superior proposal to the existing deal with Regis Resources.
“Genesis has offered 0.7629 of its shares plus $0.475 cash for each Vault share, valuing Vault at $5.274 a share based on Genesis’s Friday closing price. The offer represents a 14.5% premium to the implied value of the Regis transaction.”
It was only the other day (29 June) that Mining.com.au reported:
“Investors can expect more mergers, acquisitions, and deals for the foreseeable future.”
It’s clear that Australian gold producers are generating strong free cash flow, and now they have to decide how to allocate it. They can invest in exploration, acquisitions — or return it to shareholders.
Greatland Gold (ASX:GGP) has a market cap of $7.9 billion.
GGP did 6% better than the guidance of 260,000–310,000 ounces for FY26.
The company has no debt and just under $1.3 billion in cash after adding $81 million for the quarter just gone.
It’s clear that the Australian gold industry remains in rude health for the moment.
Write to Callum Newman at Mining.com.au
Images: Market Index & Vault Minerals
