Saracen Share Price Flat, Waiting for Next Gold Price Surge (ASX:SAR)

A quick look at the Saracen Mineral Holdings Ltd [ASX:SAR] share price.

The Perth-based miner recently announced the acquisition of 50% of the Super Pit.

It’s based within 300kms of Kalgoorlie in Northern West Australia.

The company believes this will catapult SAR into the next league of gold miners.

The SAR share price is flat with the gold price steadying of late, trading at $5.09 at the time of writing.

ASX SAR share price chart 1

Source: Optuma

What’s happening at Saracen Minerals?

With the new holdings in the Super Pit, Sacaren will have three operations including Thunderbox and Carosue Dam.

All combined, this has now pushed the company into rare air, becoming one of the top 20 global gold producers.

The company recently announced their yearly results:

  • NPAT up 105% to A$189.7m (record)
  • EBITDA² up 104% to A$447.6m (record)
  • Revenue up 93% to A$1.07 billion
  • Gold production up 47% 520,414oz (record)
  • Debt of A$321.5m and a net cash position of A$48m, 7 months after drawing down A$400m to partly fund the acquisition of 50% of the Kalgoorlie Super Pit

Saracen Managing Director Raleigh Finlayson said that FY2020 was a landmark year for Saracen.

These results show Saracen has successfully made the transition to the big league of ASX gold producers.

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SAR share price in context of recent developments

SAR is seeking to ‘future-proof’ the company, and with the strong financial results and acquisition of the Super Pit, things could be looking up for the company should the gold price keep rising.

You can see the gold price in AUD terms below:

Gold Price in AUD - Aussie Dollar Gold Price

Source: Optuma

And the SAR share price below:

ASX SAR - Saracen Share Price Chart 2

Source: Optuma

The company’s stock price fell for the last four weeks to its current level.

If this decline continues, then the levels of $4.78 and $4.66 may provide future support.

With $4.78 being 50% of the last major range and $4.66 being the all-time high level set back in August 2019, both could prove to be very strong levels.

Should the price turn to the upside, then the level of $5.70 may give resistance to a further climb.

Regards

Carl Wittkopp

For Money Morning

PS: How to pick winning gold stocks — the complete guide. Download it for free right here.


Carl Wittkopp writes for The Rum Rebellion and has a diploma in Financial Planning. He specialises in the technical analysis of stocks.


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