This article by Josh Chiat was published by * on 13 March 2024."In July 2020, as gold prices approached a then record of $US2075/oz in the wake of the Covid-19 pandemic, Aussie gold stocks surged to new heights, with the ASX All gold sub-index hitting an ATH of 9528 points.
Fast forward to March 2024 and gold prices have eclipsed those now antiquated records, yet the sub-index is trading at just 6955 points.
With gold at $US2180/oz, bullion is some 5 per cent above previous historic highs, yet miners have tumbled more than 25 per cent over the same period.
It could create an enormous arbitrage for gold bulls who stick to their guns, experts say.
“Any bounce on news is an opportunity to sell. There’s a massive discrepancy and it’s an inconsistency,” said Argonaut PCF vice -chairman Liam Twigger.
“Normally you’d see them rise. Historically, junior explorers and developers might trade at $60 an ounce and as you make more progress, you get up to $200 an ounce.
“But these guys are under $20 an ounce and there’s a huge amount of leverage.
“The opportunity is on a massive scale and I’m sure we’ll see more corporate M&A taking advantage of that, especially those that are close to infrastructure.”
In decades trading gold mines as a corporate adviser, Twigger has never seen the gulf between gold prices and equities 'so wide'.
That will give rise to takeovers and mergers as bigger companies look to use scrip to boost scale and engulf undercapitalised juniors".
