AuStar Gold Share Price Swerves COVID Restrictions (ASX:AUL)

AuStar Gold Share Price Swerves COVID Restrictions (ASX:AUL)

Gold producer AuStar Gold Ltd’s [ASX:AUL] share price is trading higher today thanks to positive news regarding its operations in Victoria.

The small-cap gold producer has struggled to break the 30 cents per share mark despite the record run in gold price.

However, the AUL share price could be building upwards momentum with the miner’s operations unlikely to be impacted by Victoria’s strict COVID-19 lockdown.

At time of writing, AUL shares are up 9.8% or 2.5 cents to trade at 28 cents per share.

ASX AUL Share Price Chart - Aus Star Gold Shares

Source: Tradingview

Operations ‘unaffected’

With the gold price still heating up — and it may be on the boil for a while — AUL struck me as an interesting stock.

You may remember when we covered Red River Resources Ltd [ASX:RVR] last month.

We cover a lot of small-cap gold companies here at The Daily Reckoning Australia.

And there seems to be a hotbed of activity among this cohort given the record price of gold.

What we don’t see so often are small-cap gold producers.

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One reason for that is they don’t have the same level of excitement behind them.

They are usually focused on restarting historic mines that may not have a large resource.

Or at least, do not have a large ‘identified’ resource.

And produce only small mineral quantities compared to their larger counterparts.

Though they can certainly be attractive shares because they already have a source of cash flow.

These kinds of companies survive because they’re good at spotting opportunities that have a low cost to entry.

That’s what AUL does.

And the good news for AUL shareholders is that it is business as usual despite Victoria’s tough new lockdown.

AUL already took precautions in 2019 to reduce their reliance on fly-in/fly-out staff.

What’s AuStar got?

AUL has two mines and both have historical productions.

The Morning Star mine is located 120km from Melbourne and was once one of Australia’s largest gold mines.

Morning Star has reportedly produced more than 800,000 ounces at an average grade of 26.5 grams per tonne.

It is also currently in production.

AUL’s second mine, the Rose of Denmark (RoD), is located 15km from Morning Star and has historically produced over 36,000oz of gold.

The mine also has a current inferred resource of 7,763 ounces of gold.

Which is certainly small in comparison to what we usually cover.

However, exploration has been limited at RoD, but recent results have discovered bonanza grade finds.

With operations to continue as normal and a strong gold price, AUL could be a stock to watch.

If gold continues its uptick in price, the AUL share price could be dragged higher.

With the Aussie gold scene heating up, gold stocks could be set to boom. Our resident gold expert Shae Russell has tipped Australia to become the next ‘gold epicentre’, meaning there could be big spikes in Aussie gold stock prices. If you want to learn more, download your free report here.


Kind regards,

Lachlann Tierney

For The Daily Reckoning Australia