Why Analysts Believe In 2020 Gold Was Used By Many As A Strategic Asset Versus a Tactical Play

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Mar 10, 2021, 08:45 ET

PALM BEACH, Fla., March 10, 2021 /PRNewswire/ -- In 2020, Gold gained all-time highs because of risk, rates and momentum, according to industry experts. Gold was one of the best performing major assets of 2020 driven by a combination of: high risk; low interest rates; and a positive price momentum – especially during late spring and summer. Reports show that Gold also had one of the lowest drawdowns during the year, thus helping investors limit losses and manage volatility risk in their portfolios. Gold.org pointed out that: "… by early August, the LBMA Gold Price PM reached a historical high of US$2,067.15/oz as well as record highs in all other major currencies. While the gold prices subsequently consolidated below its intra-year high, it remained comfortably above US$1,850/oz for most of Q3 and Q4, finishing the year at US$1,887.60/oz… Interestingly, gold's price performance in the second half of the year seemed to be linked more to physical investment demand – whether in the form of gold ETFs or bar and coins – rather than through the more speculative futures market… Investors' preference for physical and physical-linked gold products last year further supports anecdotal evidence that, this time around, gold was used by many as a strategic asset rather than purely as a tactical play." Active stocks in the mining markets this week include Golden Independence Mining Corp. (OTCQB: GIDMF) (CSE: IGLD), Hecla Mining Company (NYSE: HL), Newmont Corporation (NYSE: NEM) (TSX: NGT), New Gold Inc. (NYSE American: NGD) (TSX: NGD), IAMGOLD Corporation (NYSE: IAG) (TSX: IMG).

Gold.org's GoldHub continued, saying: "Economic recovery and low interest rates set the tone. The COVID-19 pandemic raised uncertainty by compounding existing risks and creating new ones. But by the end of last year, investors were optimistic that the worst was over. Looking ahead, we believe that investors will likely see the low interest rate environment as an opportunity to add risk assets in the hope that economic recovery is on the immediate horizon. That said, investors will likely also be navigating potential portfolio risks including: ballooning budget deficits; inflationary pressures ; and market corrections amid already high equity valuations. In our outlook for gold, we believe investment demand will remain well supported while gold consumption should benefit from the nascent economic recovery, especially in emerging markets. "

Golden Independence Mining Corp. (CSE: IGLD) (OTCQB:GIDMF) BREAKING NEWS: GOLDEN INDEPENDENCE INTERSECTS 0.617 G/T GOLD AND 3.8 G/T SILVER OVER 255 FEET FROM SURFACE AT INDEPENDENCE PROJECT - Golden Independence (the "Company") is pleased to announce the next series of drill results from its recently completed 2020 resource expansion drill program at the Independence project, south of Battle Mountain, Nevada. Results from these three reverse circulation (RC) holes include:

0.617 g/t gold and 3.8 g/t silver over 255 feet (77.7 metres)

including 2.528 g/t gold and 3.0 g/t silver over 35 feet (10.7 metres)

0.302 g/t gold and 4.4 g/t silver over 325 feet (99.1 metres)

including 0.593 g/t gold and 3.3 g/t silver over 30 feet (9.1 metres)

0.291 g/t gold and 7.0 g/t silver over 305 feet (93.0 metres)

including 0.659 g/t gold and 19.0 g/t silver over 40 feet (12.2 metres)
and 0.670 g/t gold and 7.5 g/t silver over 55 feet (16.8 metres)

"These are the remainder of the initial Golden Independence holes testing the intrusive at the north end of the property." commented Golden Independence President Tim Henneberry. "The initial six holes into the intrusive all intersected good long intervals of continuous gold mineralization with shorter higher-grade intervals within the longer intercepts." he continued. "The oxide gold mineralization within the intrusive indicates a significant expansion of the mineralized footprint which should be reflected in the upcoming H1 resource estimate." he concluded.

"Drilling at the north end of the project continues to return significant lengths of mineralized material from surface." noted Golden Independence CEO Christos Doulis. "Of particular note is hole AGEI-20 which returned 0.617 g/t gold and 3.8 g/t silver over 255 feet from surface, extending mineralization well beyond the 2010 historical resource pit shell. These results continue to reinforce our belief that we will be able to significantly expand the historic oxide resource at the Independence project in the near term." Read this entire release for the Golden Independence news at: https://goldenindependence.co/news/

Other recent developments in the mining markets include:

Hecla Mining Company (NYSE: HL) recently announced fourth quarter and full year 2020 financial and operating results.

Highlights were: Fourth quarter sales of $188.9 million; cash flow from operations of $64.9 million; free cash flow $28.3 million net income of $0.8 million; adjusted net income applicable to common shareholders of $13.0 million, or $0.02 per share; and adjusted EBITDA of $55.8 million; 2020 silver production of 13.5 million ounces, up 7% and gold production of 208,962 ounces, down 23%, from 2019, which was Hecla's highest annual gold production; 2020 sales of $691.9 million (the highest in the Company's history); cash flow from operations of $180.8 million; free cash flow of $89.8 million; adjusted net income applicable to common shareholders of $23.1 million, or $0.04 per share; net loss of $16.8 million; and adjusted EBITDA of $224.3 million; Third highest silver and gold reserves in Company's 130-year history despite significant interruptions to 2020 exploration program due to COVID-19; Exploration discoveries at Midas, Casa Berardi, San Sebastian, Heva Hosco, and Kinskuch expect to be further drilled in 2021; Net debt reduction of approximately $81 million, or 17%, from March 31, 2020; Year-end cash position of $130 million, an increase of $67 million from 2019 with the credit facility undrawn; All-Injury Frequency Rate (AIFR) of 1.22 for 2020, lowest in the Company's history and a reduction of 24% over 2019; Lucky Friday returned to full production levels in the fourth quarter of 2020; and Production guidance increases projected silver production over 2020 production.

New Gold Inc. (TSX: NGD) (NYSE American: NGD) recently reported fourth quarter and annual results as of December 31, 2020, achieving the mid-range of the revised annual production and cash cost guidance, with All-in Sustaining Costs ("AISC") below revised annual guidance. An earnings conference call and webcast will begin on February 19, 2021 at 8:30 am Eastern Time to discuss the fourth quarter and year-end financial results (details provided at the end of this news release).

The Company ended the year repositioned for long-term success and is expected to transition to positive free cash flow in 2021. Operational and cost performance has improved, strategic capital projects have been advanced, the balance sheet was restructured, and our liquidity position has significantly improved. The focus in 2021 has now shifted to driving further operational and cost optimizations at Rainy River and advancing B3 and C-Zone development at the New Afton Mine. Exploration drilling programs at Rainy River and New Afton are currently underway that could potentially increase resource inventory and extend mine life as we advance on our growth strategy. New Gold begins 2021 as a much stronger Company with a growing, higher-margin production profile from the Rainy River Mine and the Company now fully benefits from higher gold and copper prices.

IAMGOLD Corporation (TSX: IMG) (NYSE: IAG) recently announced additional assay results from its delineation diamond drilling program at the Gosselin Zone discovery, located approximately 1.5 kilometres northeast of the Côté Gold deposit. The Gosselin delineation drilling program is being undertaken as part of the Côté Gold Joint Venture Project, a 70:30 joint venture between IAMGOLD and Sumitomo Metal Mining Co., Ltd. ("SMM"). Côté, located 125 km southwest of Timmins and 175 km north of Sudbury, Ontario, Canada, is currently under construction with first gold production anticipated in the second half of 2023 (see news release dated July 21, 2020).

In January 2021, IAMGOLD reported the completion of thirty-three (33) diamond drill holes totaling 13,735 metres as part of the resource delineation drilling program, completed between the fourth quarter 2019 and early December 2020. Assay results previously reported from the first twenty-four (24) diamond drill holes totaling 10,049 metres confirmed the continuity of broad gold bearing mineralized intervals associated with the Gosselin Zone (see news release dated January 21, 2021).

Newmont Corporation (NYSE: NEM) (TSX: NGT) recently announced full year and fourth quarter 2020 results.

2020 Highlights were: Produced 5.9 million attributable ounces of gold and over 1 million attributable gold equivalent ounces of co-products, gold CAS^* of $756 per ounce, and gold AISC^* of $1,045 per ounce achieving 2020 full-year guidance; Generated record $4.9 billion of cash from continuing operations and $3.6 billion of Free Cash Flow (97% attributable to Newmont)^;Ended the year with $5.5 billion of consolidated cash and $8.5 billion of liquidity with a net debt to adjusted EBITDA^* ratio of 0.2x; Announced industry-leading dividend framework and declared fourth quarter dividend of $0.55 per share, an increase of 38 percent over the prior quarter and a total declared dividend for 2020 of $1.45 per share^**; Completed the 2020 $1 billion share-repurchase program and recently announced a new $1 billion share-repurchase program; Delivered over $2.7 billion to shareholders through dividends and share buybacks in 2019 and 2020; Achieved best safety performance in the Company's history, focusing on fatality risks across our business; Recognized as top-ranked gold miner for the sixth consecutive year in DJSI Index, announced industry-leading climate targets for greenhouse gas emissions and committed $500 million over 5 years to climate change initiatives; Reported industry-leading reserves of over 94 million ounces of gold mineral reserves and 65 million ounces of gold equivalent ounces reserves; Announced 2021 outlook of 6.5 million ounces for 2021, and between 6.2 and 6.7 million ounces through 2023 and between 6.5 and 7.0 million ounces longer-term through 2025.

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