Moody’s Credit Downgrade Just Triggered Another Gold Rally – Here’s What’s Next

Earlier this week, Moody’s shocked the markets with a US credit downgrade, citing the national budget deficit. With that downgrade, the dollar slipped, and triggerd the flight to safety in gold. That’s why gold rallied back to $3,288. That’s also why gold stocks are gaining momentum, including Formation Metals Inc. (CNSX:FOMO.CN) (OTCPK:FOMTF), Freeport-McMoRan (NYSE:FCX), Centerra Gold (NYSE:CGAU) (TSX:GG.TO), Barrick Gold (NYSE:GOLD) (TSX:ABX.TO) and Newmont Corp. (NYSE:NEM) (TSX:NGT.TO).

“There’s still a level of uncertainty out in the market. Most notably, the Moody’s downgrade, weakening dollar have supported teh precious metals complex overall,” said David Meger, director of metals trading at High Ridge Futures, as quoted by MSN.com.

Helping, Goldman Sachs says gold could rally to $3,700 this year, and to $4,000 by 2026. UBS analysts say gold could rally to $3,500 by December. All thanks to stronger-than-expected central bank demand for gold, which isn’t expected to slow any time soon. In fact, central banks are only accelerating demand. China, for example, just expanded its gold reserves for the sixth consecutive month, adding 70,000 troy ounces in April.

Look at Formation Metals Inc. (CNSX:FOMO.CN) (OTCPK:FOMTF), For Example

Formation Metals Inc. (CNSX:FOMO.CN) (OTCPK:FOMTF), a North American mineral acquisition and exploration company, is pleased to announce plans for executing a 20,000 metre multi-phase drill program at its flagship N2 Gold Project in Quebec, an advanced gold project with a global historic resource of ~870,000 ounces: 18 Mt grading 1.4 g/t Au (~809,000 oz Au) across four zones (A, East, RJ-East, and Central) and 243 Kt grading 7.82 g/t Au (~61,000 oz Au) across the RJ zone.

The first 5,000 metres of the drill program is fully funded and is intended to commence this summer.

The drill program is designed to focus on discovery drilling at new high-potential targets along the mineralization strikes at the "A", "RJ" and "Central" zones in the northern part of the property in order to discover new auriferous trends and unlock new zones of gold mineralization. The program will also focus on high-priority infilling and expansion targets in these zones to significantly enhance the project resource base through the recent exploration permit.

Historical highlights from the top two priority zones include:

- A Zone: With a historical resource of ~522,900 gold ounces (10.7 Mt @ 1.52 g/t Au), the "A" Zone is a shallow, highly continuous, low-variability historic gold deposit with ~15,000 metres of drilling across 55 drillholes, 84% of which intercepted gold mineralization. The best historical intercept includes up to 1.7 g/t over 35 metres with a metal factor of 93. ~1.65 km of strike has been drilled, with 3.1+ km of strike to be tested as part of the 20,000 metre program.

- RJ Zone: With a historical resource of ~61,100 gold ounces (243 Kt @ 7.82 g/t Au), the "RJ" Zone is a high-grade target that was expanded upon in the last drill program in 2008 by Agnico-Eagle when gold was approximately ~$800/oz. Historically, 20,875 metres has been drilled over 82 drillholes, with best intercepts of 48 g/t over 0.5 metres and 16.5 g/t over 3.6 metres. ~900 metres of strike has been drilled, with 4.75+ km of strike to be tested as part of the 20,000 metre program.

The Company has formally submitted its Application for Autorisation de Travaux d'exploration à Impacts (ATI) to the Ministère des Ressources naturelles et des Forets (MERN) following discussions with all necessary parties and anticipates receiving its ATI permit within the next 30 to 40 days, after which it intends on commencing its maiden drill program at N2.

Deepak Varshney, CEO of Formation Metals, commented: "We are thrilled to unveil our drill plans for the N2 Project. Given the scale of the property, the compelling geological data, and the Abitibi Greenstone Belt's established history as a hotbed for gold mining, we believe that a program of this scale will deliver our goal of growing N2's historical resource into a near-surface multi-million-ounce deposit."

Mr. Varshney continued: "We see the potential for over three million ounces of gold at N2, and our fully funded maiden 5,000-metre drilling program will mark the beginning of Formation's pursuit of that goal. Our maiden program will focus on building on the successes of our predecessors. The drilling discoveries made by Agnico-Eagle and Cypress after the initial historic resource estimate show the expansion potential at N2. With gold at $3,200, over 4 times the price in 2008 when Agnico last drilled the project, we believe that the timing is perfect for N2 and look forward to a very busy upcoming quarter."

Other related developments from around the markets include:

Freeport-McMoRan just reported first quarter 2025 results. Net income attributable to common stock in first-quarter 2025 totaled $352 million, $0.24 per share, and adjusted net income attributable to common stock totaled $358 million, $0.24 per share. Consolidated production totaled 868 million pounds of copper, 287 thousand ounces of gold and 23 million pounds of molybdenum in first-quarter 2025. Operating cash flows totaled $1.1 billion, net of $0.3 billion of working capital and other uses, in first-quarter 2025. Operating cash flows are expected to approximate $7.0 billion, including $0.2 billion of working capital and other sources, for the year 2025, based on achievement of current sales volume and cost estimates, and assuming prices of $4.15 per pound for copper, $3,000 per ounce for gold and $20.00 per pound for molybdenum for the remainder of 2025.

Centerra Gold reported its fourth quarter 2024 operating and financial results, and issued 2025 guidance. President and CEO, Paul Tomory, commented, “In the fourth quarter, we had steady gold and copper production and ended 2024 near the low end of our production guidance range. At Öksüt, we benefited from elevated production in 2024 by processing inventory that was accumulated during the shutdown in 2022 and 2023 to achieve over 200,000 ounces. Since the restart of operations in June 2023, Öksüt generated close to $550 million in cash provided from operations and over $480 million in free cash flow NG. We generated strong free cash flow at both operations in the fourth quarter, driven by robust contributions from Mount Milligan, which increased our cash and cash equivalents to $625 million.”

“Looking ahead to 2025, our production guidance reflects Öksüt returning to normal production levels, as previously planned, after two years of processing excess inventory, which in turn has impacted unit costs. We remain disciplined to protect margins through initiatives at our sites including at Mount Milligan through the site optimization program which will continue in 2025. We forecast continued strong free cash flow generation at our operations in 2025, allowing us to fund the restart of Thompson Creek and continue to return capital to shareholders, while preserving our cash for strategic opportunities.”

Barrick Gold announced that it has reached an agreement to sell the 50 percent interest in the Donlin Gold Project in Alaska held by Barrick’s subsidiary Barrick Gold U.S. Inc. to affiliates of Paulson Advisers LLC and NOVAGOLD Resources Inc. (NYSE American, TSX:NG) for $1 billion in cash. In addition, Barrick has granted NOVAGOLD an option to purchase the outstanding debt owed to Barrick in connection with the Donlin Gold Project for $90 million if purchased prior to closing, or for $100 million if purchased within 18 months from closing, when the option expires. If that option is not exercised, the debt will remain outstanding, substantially in accordance with its existing terms. Paulson and NOVAGOLD have agreed to acquire 80 percent and 20 percent, respectively, of Barrick’s subsidiary’s interest in Donlin Gold LLC, the entity that holds the Donlin Gold Project, with each purchaser contributing pro rata to the purchase price and several existing shareholders, including Paulson, backstopping NOVAGOLD’s purchase commitment.

Newmont Corp. announced first quarter 2025 results and declared a dividend of $0.25 per share. “Following on from a robust fourth quarter performance, Newmont has delivered 1.5 million attributable gold ounces and generated a record first quarter free cash flow of $1.2 billion, demonstrating the strength of our unrivaled Tier 1 Portfolio,” said Tom Palmer, Newmont's President and Chief Executive Officer. "We also successfully completed our non-core divestiture program, generating up to $4.3 billion in total gross proceeds including over $2.5 billion of after-tax cash proceeds in the first half of 2025. With these significant achievements and a solid start to the year, we remain firmly on track to meet our 2025 guidance, continuing on our journey towards creating the world’s leading gold and copper portfolio for the benefit of our shareholders."

Legal Disclaimer / Except for the historical information presented herein, matters discussed in this article contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Winning Media is not registered with any financial or securities regulatory authority and does not provide nor claims to provide investment advice or recommendations to readers of this release. For making specific investment decisions, readers should seek their own advice. Winning Media is only compensated for its services in the form of cash-based compensation. Pursuant to an agreement Winning Media has been paid three thousand five hundred dollars for advertising and marketing services for Formation Metals Inc. by Formation Metals Inc. We own ZERO shares of Formation Metals Inc. Please click here for full disclaimer.

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