Spot gold was trading near the $1,930 mark on Wednesday in continued consolidation after a four-month sprint brought the commodity up 20% from the Sept. 28 low of $1,614.92.
Gold has reacted bullishly to the falling U.S. dollar and fears the Federal Reserve’s series of interest rate hikes will plunge the U.S. into a recession later this year.
“The Fed gets very nervous when the dollar starts to hit its peak. They know that a weak dollar does a lot of bad things to the economy also. So, like, they’re stuck in this position where they have to ever-defend the dollar even though it doesn’t deserve it,” Maple Gold Mines, Ltd MGMLF MGM CEO Matthew Hornor said in a recent interview with Benzinga.
“Because we went through this massive printing of currency over the last couple years, for understood reasons, the whole world is grappling with this inflation problem and trying to suck money back out of the money supply to correct things a bit, because we just gave too much money away,” Hornor said.
The plunging dollar, soaring inflation, rising interest rates and the possibility of a recession have had a positive impact on the price of gold.
The Fed has “a lot of things on their hands to deal with and ultimately all of that is very bullish for gold and I think this year we’re going to see new highs for gold for sure. I think we might even hit $2,500 this year and higher,” said Hornor.
Matthew Hornor On Bitcoin Vs Gold: “I actually do not hate Bitcoin BTC/USD and [see] a couple of the other cryptocurrencies as things that one should have in their portfolio to some extent,” he said.
But, “gold in comparison or a comparative asset class or store of value is far more stable and always has been and I think always will be.”
Whether or not Bitcoin is a solid hedge against inflation — or a full-blown recession — can’t be confirmed due to its lack of trading history during severe economic downturns. The last U.S. recession was caused by the collapse of the U.S. housing bubble and lasted from December 2007 to June 2009, the year Bitcoin started transacting.
Gold, on the other hand, has been traded for centuries and has historically been shown to be a good hedge for inflation and a wise long-term hold during a recession.
“The blip that we saw with crypto going crazy and all the FOMO and all the rest, in the context of the history of the gold market was kind of a millisecond if you look at the history of gold and how it has been used in society for hundreds if not thousands of years,” Hornor said.
“Bitcoin did have a negative impact on the gold buyers and the gold investors, and I think that has tempered of late, which is helping the gold bugs and also the gold equities like [Maple Gold].
“The nice thing about owning shares in gold equities, producers and juniors like us is that it’s backed by something actually real. There’s actually a gold shiny metal object under the ground that can be produced that creates value for those shares.”
Hornor Talks Maple Gold, What To Watch In 2023: “There are three projects that we currently are actively drilling in a 400 sq km land package, so it’s significant and compelling,” Hornor said.
Maple Gold has three projects: its 100%-controlled Eagle Mine Project; and its Joutel Mine and Douay Mine projects, which are owned by a 50-50 joint venture between Maple Gold and Agnico Eagle Mines Ltd AEM. All the projects are in Quebec, Canada.
“There are three core assets that are getting better every day, but we have so many other targets,” Hornor said.
The junior miner has five drill rigs actively turning and about 20% of the results from 2022 pending, which Hornor expects to receive soon.
“Over the next few weeks, I think we’re going to have a lot of information coming out to the market. Within the month of February, I think we’ll have at least one if not two PRs around some of the results we’re seeing,” he said.
On Jan. 9, Maple Gold announced it drilled 10.3 grams per ton (g/t) gold over 7.8 meters, Including 41.1 g/t Gold over 1 meter at its North Mine Horizon at Eagle. The company was working to complete a 6,000-meter drill program at its Telbel project by the end of January, 2023. “With the deeper Telbel holes, I mean we’re going after 30, 40, 50 to 80 gram targets that were left behind by Eagle back in 1993,” Hornor said.
In total, Hornor expects to drill between 20,000 to 30,000 meters across Maple Mine’s three projects this year, with 15,000 meters planned to take place before breaking temporarily to analyze the results and plan a subsequent program. “It’s going to be a very robust cycle with a lot of meterage and a lot of results coming out to the market,” Hornor said.
“I’d like the market to really pay attention to not just the individual drill programs but take a step back to appreciate the size and scale,” he added. “Even though some of the drill intercepts and information out in the media are in certain smaller sections, we’re really focused on what that means for the larger project potential.”
On just how large of a discovery Maple Gold could be sitting on top of, Hornor said, “We think we’re sitting on something that could be significantly large and something that endures for many generations.
“I think we’ll have some surprises for the market outside the current resource areas because again we have a huge land package that is begging to be worked on and we’re going to answer its call,” Hornor said about the upcoming year for Maple Gold.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
