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NEWS

Cashed up

and ready

to play

by Dominic Piper

id-tier producers and junior explorers are set for a big
Myear in 2021 but they are unlikely to tap the market in
the way they did last year.
Two separate reports from accounting firms PwC and BDO
in late 2020 highlighted the flood of cash which hit both mid-
tier and junior sectors during the year as investors flocked to
gold equities in search of yield.
Sherif Andrawes
“Interest rates are at record lows so investors are moving
into equities in the search for yield and investors turn to gold sitting well ahead of the collective performance of the
during times of uncertainty, so Australian gold companies ASX200. Net assets are up 20% and market caps 40% so
can raise as much as they want at the moment,” BDO global investor sentiment has been very strong towards gold.”
natural resources leader Sherif Andrawes told GMJ.
PwC Australia national mining leader Debbie Smith said
PwC’s Aussie Mine 2020 report – focused on the 50 ASX- the profit growth and expansion of the group – particularly
listed “mid-tier” mining companies with market values under
the gold companies – underlined their importance to an
$5 billion – showed the surge in gold prices through 2020 Australian economy still battling against the effects of the
had catapulted several gold companies to mid-tier status,
coronavirus pandemic.
with gold miners accounting for more than 50% of new
“The MT50 spent $5.9 billion on capex during the year
entrants to the Mid-Tier 50 (MT50) in 2020. Gold miners now
and with momentum continuing on projects, this continued
represent the largest group making up 44% of the MT50 and
investment will continue to be a very important contributor
had three new entrants to the top 10 mid-tier miners.
to jobs growth,” Smith said. “With contributions like this and
PwC Australia 2020 Aussie Mine project leader Justin Eve strong finances, we believe the MT50 are well positioned to
said it was not surprising gold companies had enjoyed a resource our nation’s economic recovery.”
stellar 2020.
Such is the strength of the MT50, the combined group is
“Investors often turn to gold in times of high uncertainty and the equivalent of an ASX5 company. Eve said that firepower
global volatility and macroeconomic conditions have driven could be deployed this year.
the price rises,” Eve said.
“The big rump of the mid-tier has the balance sheet to
“Gold’s stellar performance in the past year makes it an
leverage from,” he said. “Cash was up 16% and that war
outlier in the 2020 MT50 and across the entire economy,

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