Gold Digging Times

Hey Superheroes,

Despite last week’s volatility, the ASX 200 is back to hitting all-time highs as earnings season goes full throttle. JB Hi-Fi, CBA, CSL and AMP were amongst the biggest names that reported this week.

Over on Wall Street, optimism was dampened slightly as U.S. inflation figures came in 0.5% higher last month – the highest one month jump since mid-2023. With Trump’s tariffs looming, U.S. inflation is expected to rise in the coming months. 

Whether or not these macroeconomic events are expected to impact Australia, we’ll see in the RBA’s rate decision next Tuesday.

Let’s get into this week’s big news.

Probably no jewellery this Valentine’s Day

Sad news to those who love jewellery – Gold prices just hit another all-time high this week to hit A$4,675/oz (1 oz = ~28g), or just shy of US$3,000 per ounce. That’s 50% higher than last Valentine’s Day. 

On the other hand, investors of gold miners are cheering. Here are some of this week’s stand outs.

🏆 Evolution Mining 

With gold prices steadily rising over the past year, it’s no surprise that Evolution Mining (EVN.AU) absolutely smashed half-year earnings compared with last year:

• EBITDA: A$985M in H1 FY25 vs A$487M in H1 FY24 (↑102% YoY)
• Net profit: A$365M vs A$97M (↑277% YoY)
• Net mine cash flow: A$435M vs A$203M (↑114% YoY)
• Interim dividend per share: A$0.07 vs A$0.02 (↑250% YoY)
• Gold produced: 388,346 oz vs 319,377 oz (↑22% YoY)
• Achieved gold price per oz: A$3,875 vs A$3,000 (↑29% YoY)

While its main product is gold, Evolution Mining also mines copper, which has also seen a price increase over the last year.

But aside from its stellar financial performance, the miner also boasted more cost-efficient mining operations and further growth opportunities in its existing mines.

Shares are now up nearly 8% for the week, trading at its highest since 2020. Using its last closing price, its annualised dividend yield is ~2.2%.

⛏️ Kalgoorlie Gold Mining

Despite being a smaller name in the sector, Superheroes seem to be well aware of Kalgoorlie Gold Mining’s (KAL.AU) existence – sending it into one of this week’s top-traded stocks.

Kalgoorlie shares have soared 320% over the past month after the company discovered sizable high-grade gold in one of its drill holes. It now aims to fast-track drilling plans to start in early March to assess the potential for (even) more gold. We’ll be watching this space.

🤔 Will gold prices continue going up?

Gold has traditionally been viewed as an inflation hedge and a “safe haven.” Its soaring prices is likely a testament to the sticky inflation we’ve seen in recent years, further bolstered by recent fears of a global trade war. 

Similarly, demand for gold tends to go up as rates go down due to lower opportunity costs in holding a non-interest-bearing asset like gold. Analysts have found stronger investor interest in the commodity when the Fed began cutting rates last year.

With these factors expected to remain this year, the general analyst consensus is that gold prices may remain elevated in the near future.

🔦  Some other things we’re shining the Spotlight on:

US TARIFFS ON AU: Trump announced 25% tariffs on steel and aluminium imports on Monday, sparking concerns for Aussie miners. The tariffs are set to be implemented in early March – however Albo seems to think he can negotiate with President Trump to let Australia off the hook.

MY SHARE PRICE IS A TEMPLE: Temple & Webster boasted a lot more customers, higher sales per customer and lower customer service expenses, ending H1 FY25 with 118% higher net income year-on-year. Shares are trading 21% higher over the week.

THE CHEMIST IS HERE: Chemist Warehouse debuted on the ASX yesterday – through its merger with already-listed Sigma Healthcare – trading under the ticker (SIG.AU). Interestingly, the chemist’s franchisees quickly sold out of their stakes, with A$400M worth of shares flowing from franchisees to fund managers and retail investors within the first hour of trading. 

Half-year earnings season continues in Australia next week with BHP, Rio Tinto, Mineral Resources, Block and Guzman y Gomez among those reporting. 

Keep up to date on the markets by following us on Instagram @superheroau. Happy Valentine’s Day, Superheroes!