The overnight gold price drop will obviously cause ructions in the the gold miner space next week, especially in those that have been least affected by the changed gold sentiment. As I have repeatedly said, all valuations including GPR depend on the POG, in the short and long term.
But GPR and other companies that have been heavily discounted, but are in an advanced stage of company maker developments, are unlikely IMHO to be much further affected for long.
The clip below is a good discussion on the likelihood of gold price recovery by 2022, and hence any major retracements now may be a trading opportunity. Also, one has to wonder wether this will be a major spur for M&A. What's a cashed up company with a undervalued SP to do .... a buy back or a cheap value adding acquisition .... clearly the latter is always the best solution.
This process may be accentuated by sector rotation. The lithium bubble grows along with every commodity vaguely relayed to "battery technology", and even out of favour coal stocks are ramping up. BUY in GLOOM, SELL in BOOM .... leave your good gold stocks in the bottom drawer and take some easy profits elsewhere is what I'll be doing. Moreover, if there's ridiculous value in GPR I'll be topping up my already substantial holding.
An irony in the current COVID crisis is that Woodlark Island is like to be fully vaccinated before Australia. One of many advantages of this small island, with a small population having a valuable project development by a very capable management and BOD.
Needless to say, my sentiment remains "strong buy".
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