There has been a lot of talk about how price takers are suffering. Especially with energy metals prices have been on the nose and their source of excess returns in 2020 to 2022. But then it’s easy to forget that there is a metal currently trading at all time highs which is quite a feat given Cleopatra reportedly loved being adorned by the stuff and she was around in BC times. Of course I am talking about Gold, and after a significant strengthening of the US dollar, the commodity has certainly received another free kick in AUD terms in recent years.
For those that have read my analysis over the years, you will know that I have repeatedly said that investing in an operational miner is different from investing in the commodity itself as it carries more risk than just the price. Therefore when you look for a miner, look for one where the production profile is expected to increase overtime, whilst also benefiting from a solid commodity price as well.
It is in this context that we cover Vault Minerals (ASX:VAU)
For those unaware, VAU was formerly known as Red 5 Limited. It is an Australian gold mining company that recently merged with Silver Lake Resources in June 2024. This merger in their words created a leading diversified mid-tier gold producer, combining Red 5’s King of the Hills asset with Silver Lake’s significant operating portfolio, particularly in the prolific Leonora region of WA.
An investment in VAU would note only be driven by good StockRank and underlying commodity, but also by its strong production and Financial Health as evidenced in their recent quarterly production report. Further the addition of the Sugar Zone in Canada extends its projects across a new jurisdiction and the recent Deflector find in WA also offers the potential of production upside in the near future. Couple that with the current strong cash balance and it would seem the business is now self funded, with little to no need to raise any additional capital unless it makes a game changing acquisition of course.
In the latest quarter it trumpeted AISC (All in sustaining cost) of AUD$2,231 per ounce, With gold currently around AUD$4,195 per ounce that is a juicy margin.
Quality
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