By Giles Gwinnett
Proactive Investors
Heavyweight broker Goldman Sachs has started coverage on a mix of West African gold firms, aiming to identify those which look set to outperform.
The region, which includes Nigeria, Ghana and Guinea, has seen a boom in gold mines over the last decade and a number of exploration plays have been funded as production in South Africa has waned and the price of the yellow metal has outperformed.
In an extensive note, Goldman analyst Eugene King begins coverage on five plays, with notably, a ‘buy’ stance on both Endeavour (TSE:EDV) and Amara Mining (LON:AMA, TSE:AMZ), formerly Cluff Gold. It also updates its coverage on Avocet Mining (LON:AVM).
At the root of Goldman’s coverage on these junior gold firms is its bullish outlook for the metal.
This is due to the fact it believes US interest rates will continue to be low; central banks will continue to buy the metal, and risk appetite among investors is muted so they continue to look for havens such as gold.