Why $5000 Gold Could Soon Become A Reality - Seite 4

Yet, at a market cap of $40.3 million, Starr Peak could be seriously undervalued, depending on drilling results. And Starr Peak presents a highly asymmetrical risk-reward profile with risk capped on the downside but offering potential for outsized returns. Consider that AMEX is sitting potentially on ~10 million ounces of gold and has a current market cap of $264 million.

The opportunity for Amex is still mind blowing even after all the success they have already had. There is potential for its market cap to grow exponentially with all the drilling that they are currently doing and in the future as their stellar high-grade results keep rolling in.

Yet, Starr Peak's property could be sitting on a similar discovery … with a much smaller market cap. Currently, It has a $40 million market cap and they haven't even begun to scratch the surface. As the drills at Amex come closer and closer to their property line, it just adds to the probability of another potential discovery. And spurring it all along is this: The gold rally could have plenty of space to run still; so if you missed out on the mania so far, or if you missed out on Amex, this train hasn't left the station. 

Early stage gold explorers like Starr Peak (STE; LSGEF) with a good discovery could make outsized returns for investors who get in early--especially when they set up shop right next to a major discovery that eluded the majors the first time around. 

But watch what happens next as the news flow maintains a fast and furious pace: As Amex continues to drill, and with expectations of a substantial resource calculation by the end of the year, Starr Peak stock is hoping to be the biggest beneficiary. 

Gold Majors Are Still In The Game, Too

Newmont Goldcorp (NEM; NGT) is the world's largest gold miner following last year's merger between Newmont and Goldcorp. Thanks to the merger, in addition to growing economic concerns fueling a wider gold rally, its revenue increase of 43%. The spike in income paid off for investors, who saw share prices increase drastically as well as a dividend hike of 79%, making its dividend yield higher than any of its top-tier competitors. Newmont recently updated its 2020 outlook, aiming for stable production of  6 million ounces while cutting back costs into 2020.