Stocks to Watch: January

THE New Year is underway with a strong outlook for commodities and equities alike.
Stocks to Watch: January Stocks to Watch: January Stocks to Watch: January Stocks to Watch: January Stocks to Watch: January

Staff reporter

"Traditionally at this time of the (new) year the bears go away to lick their wounds. Those who wanted to sell in the end of year clean have usually done so," Far East Capital's Warwick Grigor said.

"The New Year frequently opens up on a positive note, at least for a week or two, and thin volumes make it easier for the bulls to push prices higher. Maybe it will be the same again this year, but the travel restrictions caused by the coronavirus will have an impact. More people will be watching the market than usual."

Gold is off to a strong start after the US approved a massive stimulus package and COVID-19 cases, hospitalisations and deaths continued to spiral.

Spot gold was trading at US$1950 or A$2515 an ounce this morning.

"The lacklustre performance of the gold price, going back to August, has caused traders to pull money out of the gold sector and switch into a range of different commodities," Grigor said.

"The thinner volumes in many of the speciality sectors resulted in good share price rises even though the fundamental merits were often found to be wanting.

"With the gold price showing a healthy uptrend since the end of November, we may see money moving back into the gold sector as money rotates. However, keep in mind that the weakening US$ (and stronger A$), has been a motivator for gold price movements."

Aside from the December quarter reports, which should slowly start to trickle through from next week, there's still plenty on the agenda for January.

One of the more significant events will be Saracen Mineral Holdings' extraordinary general meeting to be held next Friday.

The purpose of the meeting is to vote on the A$16 billion merger of Saracen and Northern Star Resources.

"Hopefully Saracen shareholders approve our marriage otherwise it's going to be very uncomfortable at family barbeques," Northern Star's Bill Beament joked in November.

If approved by shareholders, the merger should be completed in February.

Smaller gold producer Wiluna Mining Corporation has flagged growth to resources and reserves this month at its namesake project in Western Australia.

Wiluna already has resources of 5.78 million ounces of gold at a 1 gram per tonne cut-off.

Middle Island Resources has promised a feasibility study for its Sandstone gold project in WA.

Saturn Metals is likely to update the 781,000oz resource for its Apollo Hill project this month, incorporating over 50,000m of drilling.

December big mover Legacy Iron Ore expects to upgrade the resource for its Mt Celia gold project this month.

Ausmex Mining Group flagged a resource upgrade for its Comstock gold project after the ASX rapped it over the knuckles for putting out a production target.

Outside gold and Australia, Centaurus Metals is likely to update the resource for its Jaguar nickel project in Brazil, which will feed into a scoping study.

In June, Centaurus reported a maiden resource of 48 million tonnes at 1.08% nickel for 517,500 tonnes of nickel, including a high-grade 20.6Mt at 1.56% nickel for 321,400t.

Metals Australia's scoping study for its Lac Rainy graphite project in Canada is due early this month.

3D Resources spin-out Cosmo Gold is expected to lodge a prospectus to raise at least $5 million in an initial public offering after shareholders of 3D approved the demerger late last month.

Magmatic Resources shareholders and the ASX have approved the demerger of Australian Gold and Copper, paving the way for an early January listing.

Other companies expected to list in January include Auric Mining, Torrens Mining and Odyssey Gold, the latter after completing a recapitalisation.