Gold and Real Interest Rates Are No Longer Correlated, BMO Says. What Now?
A new report by BMO Capital Markets suggests that the price of gold is no longer being driven by real interest rates. What replaced them? I unveil the answer below.
The American consumer did it again. Thanks in large part to a strong holiday shopping season, U.S. gross domestic product (GDP) expanded at a faster-than-anticipated 3.3% in the fourth quarter of 2023.
The results make the strongest case yet that the Federal Reserve has pulled off a soft landing, but they also raise questions about the timing of the central bank’s next move… and where investors should allocate their capital.
It certainly feels as if the economy has turned a new leaf, and the data appears to bear that out. At the end of last year, Fed Chair Jerome Powell’s dovish pivot ignited hopes that the days of sky-high interest rates were numbered. This was bolstered by the Federal Reserve Bank of New York’s Survey of Consumer Expectations, which shows that Americans’ inflation expectations have dropped to a two-year low. And the University of Michigan found that consumer sentiment jumped this month to its highest level since July 2021. In December and January, the good vibes saw a cumulative 29% increase, representing the biggest two-month gain since 1991.
Businesses are riding the wave of positivity as well. The preliminary Composite PMI for January indicates the sharpest rate of U.S. output growth in seven months, reflecting a buoyant business environment. Manufacturers, in particular, are increasingly confident about future output, a sentiment not seen since May 2022.
Amid these developments, the betting market is adjusting its expectations for a rate cut. According to the CME FedWatch Tool, there’s now an 88% likelihood that the central bank will lower rates to between 4.75% and 5.25% in May of this year, not March, as earlier forecast.
Why Firms Favor Gold in a Strong, High Interest Rate Economy
Interestingly, despite the rosier economic outlook, several firms are recommending gold. This may seem counterintuitive, especially with rates still above 5% and the stock market at an all-time high. Analysts at JPMorgan say the metal will benefit this year from rate cuts and the return of investment demand. XIB Asset Management, the Canadian hedge fund that soared over 200% in the first two years of the pandemic, is now betting that gold and uranium will outperform on lower rates.
“Gold and other commodity-driven equities have traditionally performed well during the next stages of the credit cycle,” one of XIB’s founders, Sean McNulty, said in an email to clients, as reported by Bloomberg.
UBS recommends buying gold on dips below $2,000 per ounce. The Swiss institution projects the yellow metal to rise as high as $2,250 per ounce by year-end on looser monetary policy, which would put pressure on the U.S. dollar and real rates, thereby boosting demand, particularly from gold-backed ETFs. After three straight years of ETF outflows, UBS predicts a shift to inflows, potentially sparking a sustained rise in gold prices.
A New Driver of Gold Prices?
As I mentioned at the top, BMO challenges this traditional view, suggesting that the relationship between gold and real interest rates has weakened. In a report titled “New Drivers for a New Gold Era,” BMO commodities analyst Colin Hamilton writes that the gold-real rate correlation, which I’ve written about many times, is now “broken.” According to him, this correlation fell apart amid the sharp real rate moves of 2022 and has not been re-established.
But if rates no longer matter, what’s the investment case? Hamilton argues that emerging economies’ push to diversify away from the U.S. dollar by increasing their gold holdings is now the most important driver of the metal going forward.
China is particularly key. The People’s Bank of China (PBoC) has become the world’s undisputed gold purchasing leader, buying the metal uninterrupted since November 2022. Last year, the bank announced a 225-metric ton increase to its gold reserves, which reached 2,235 tons by the end of December. The yellow metal now accounts for 4.3% of China’s official foreign exchange reserves, according to the World Gold Council (WGC).
As Bloomberg’s Mike McGlone recently put it, “A top reason [gold] has remained resilient is the deepest pockets on the planet—central banks—are accumulating at a breakneck pace.”
In addition, 2023 was an especially tough year for many Chinese investors, with stocks declining for the third straight year. The government is reportedly weighing a stock market rescue package backed by two trillion yuan, or roughly $278 billion, but it’s worth pointing out that similar purchases in 2015 did not immediately lift stocks.
Surveys show that Chinese households are not confident in the economy and are looking to save more and invest less in the stock market. According to Hamilton, the proportion of Chinese households holding higher levels of cash has correlated strongly to yuan-priced gold, which hit fresh highs in 2023 as the CSI 300 index of Chinese stocks sunk to a five-year low.
Given these dynamics, the major downside risk to gold prices this year could stem from a risk-on environment in China, such as an equity market rally. However, BMO and Hamilton both expect central bank buying and household investment to be a multi-year theme.
In this context, gold emerges not just as a safe haven in uncertain times, but as a strategic asset in a diversifying global economy.
Meet the top five gold producing countries! Watch the video by clicking here!
- The major market indices finished up this week. The Dow Jones Industrial Average gained 0.65%. The S&P 500 Stock Index rose 1.02%, while the Nasdaq Composite climbed 0.94%. The Russell 2000 small capitalization index gained 1.76% this week.
- The Hang Seng Composite gained 3.52% this week; while Taiwan was up 1.77% and the KOSPI rose 0.24%.
- The 10-year Treasury bond yield rose 1 basis point to 4.14%.
Airlines and Shipping
- The best performing airline stock for the week was Frontier, up 17.1%. Southwest Airlines’ fourth quarter 2023 earnings per share (EPS) of $0.37 was well ahead of mid-December implied guidance of $(0.09)-0.29 and consensus of $0.10, primarily driven by stronger revenue and better non-fuel cost. Revenue benefited from healthy leisure demand and continued yield strength, especially during peak periods, and close-in bookings (including managed business bookings) performing at the better end of expectations in November and December.
- Signs are starting to emerge that retail shippers are sending more goods by airfreight as the Red Sea crisis continues, but the next few weeks will determine whether there is a real shift from ocean freight to airfreight,” according to Xeneta. Niall van de Wouw, Xeneta chief airfreight officer, continued, “When the Red Sea crisis escalated in December, they stated that, once the impact starts to be felt in airfreight, things could happen very quickly.” The ocean and airfreight rate benchmarking platform said that consumer retail and apparel businesses are beginning to ship more of their goods by air to protect their supply chains as the Red Sea-Suez Canal disruption continues.
- American Airlines’ fourth quarter 2023 EPS of $0.29 was ahead of consensus $0.08 estimates. Similar to United Airlines, the beat was primarily driven by lower average fuel and non-fuel costs. American’s 2024 $2.25-3.25 EPS guidance compares to consensus $2.15 estimate.
- The worst performing airline stock for the week was Boeing, down 4.6%. The FAA’s grounding of the 737 MAX 9 remains in effect. Based on United’s latest schedules, flights on this model have been canceled through January 26. Currently, Alaska Airlines does not have an update in place, as the latest reflected cancelations through January 21, with 20% of flights canceled network wide.
- Carmakers, already struggling with supply chain problems, face further disruptions due to Red Sea security problems, as car-carrying vessels are rerouted, shipping executives have warned. Lasse Kristoffersen, chief executive of Oslo-based Wallenius Wilhelmsen, and Georg Whist, CEO of Gram Car Carriers, spoke after continued attacks in the Red Sea last week prompted two leading Japanese operators — NYK Line and K Line — to suspend sailings via the Suez Canal.
- FAA Administrator Mike Whitaker said that the agency is taking a much broader review of Boeing and its production and manufacturing activities. Specifically, the FAA indicated that it is now taking some of the following actions as part of its MAX oversight, as posted by the FAA: 1) Capping expanded production of new Boeing 737 MAX aircraft to ensure accountability and full compliance with required quality control procedures, 2) Launching an investigation scrutinizing Boeing’s compliance with manufacturing requirements, and 3) The FAA will use the full extent of its enforcement authority to ensure the company is held accountable for any non-compliance.
- ISI tracks web traffic to airline websites as a proxy for bookings. Airline web traffic was up 5% year-over-year for the week, compared to -5% year-over-year in the trailing four-week period.
- COSCO Shipping is positive on the tanker freight rate outlook for 2024. The Russia/Ukraine war is driving ongoing longer distance sailings, while new supply pressure remains low with shipowners cautious about new ordering. Aframax and Suezmax have benefited from the Russian ton-mile boost, while VLCC is supported by recovering Chinese imports and growing non-OPEC production.
- The Evercore ISI Airlines Survey moved up from 61.3 to 62.5 in the latest release. Leisure domestic demand improved as demand is better to start 2024. Domestic leisure demand is still running better than pre-COVID, though demand had moderated since last Spring and fare sales increased before the recent improvement. Business demand is gradually recovering but remains below 2019 levels.
- According to Raymond James, GOL filed for Chapter 11 bankruptcy protection in New York. It has secured $950M in DIP (debtor-in-possession) financing from Abra bondholders. GOL plans to use this process to restructure its near-term financial obligations and strengthen its capital structure for long-term sustainability.
- Two CEOs of major freight carriers, Maersk and DHL Group, mentioned that they expect the geopolitical disruptions in the Red Sea to continue interrupting shipping for weeks or months as they see no near-term end in sight. This will potentially prolong longer transit times as ships re-route around southern Africa. DHL’s CEO mentioned that there are now imbalances in container capacity and that it could potentially lead to shortages in the next two weeks, with the most pressure on shipments to Asia.
- According to Bank of America, international airline capacity continues to ramp up although a return to 100% of 2019 might be elusive in 2024 and depends on U.S. traffic rights negotiations and Russian airspace. International air ticket prices are likely to normalize, particularly on those routes where supply has opened. Japan demand is improving, while Thailand demand might remain mixed.
Luxury Goods and International Markets
- Sentiment in the luxury sector has been boosted by the strong results of Louis Vuitton this week. After the market closed on Thursday, the Company announced fourth-quarter revenue that exceeded the average analyst estimates (10% versus the expected 8.17%). The most significant surprise came from the wine and spirits segment, where sales grew by 4%, while – 7.47% was expected. In terms of regions, the United States was the most positive surprise, with the Company reporting an 8% revenue increase, compared to the forecasted 1.89%
- Tod’s SpA shares rose sharply this week after the Company reported a sales beat in 2023. The Italian luxury footwear firm reached 1.13 billion euros ($1.23 billion) compared with 1.1 billion euros in 2022, according to preliminary figures released late Wednesday.
- Louis Vuitton, a luxury giant listed on the Paris Stock Exchange, was the best performing S&P Global Luxury stock, gaining 16.96% in the past five days. Shares gained after the Company reported strong quarterly results.
- Tesla’s shares declined by more than 10% on Thursday after the company reported quarterly earnings per share of 71 cents, falling short of the expected 73 cents. Revenue reached $25.2 billion, which was below the expected $25.9 billion. The Company also issued a warning about slower growth for 2024. Analysts predict that Tesla will sell 2.2 million cars in 2024, a 20% decrease compared to 2023.
- Manufacturing activity in Europe remains weak. The Preliminary HCOB Eurozone Manufacturing Index was reported at 46.6 in January, an improvement from December’s level of 44.4, but still below the 50 mark that separates contraction from expansion.
- Tesla, electric car maker and distributor, was the worst performing S&P Global Luxury stock, losing 13.64% in the past five days. Shares declined after the Company reported weaker-than-expected quarterly results.
- The reporting season in the luxury sector is gaining momentum, with several companies set to announce their quarterly results next week. Ferrari, Royal Caribbean, and Decker are all scheduled to release financial results, and we may see an increase in the number of companies reporting better-than-expected numbers following this week’s strong performance by Louis Vuitton.
- This week, the central bank in China decided to reduce the Reserve Requirements Rate (RRR) for commercial banks by 50 basis points, effective on February 5. Additionally, on January 25, the People’s Bank of China lowered interest rates for refinancing and rediscounting of loans to support agriculture and small businesses by 25 basis points. The stimulus announced in mainland China has driven up equities trading in both mainland and Hong Kong.
- Fashion retailer Zara is reopening its operations in Venezuela. Local franchise operator Grupo Futura will have its first outlet up and running in an upscale Caracas mall before July, according to Zara’s parent company Inditex SA. The company shut its operations back in 2021 after hyperinflation and economic troubles hampered consumer spending.
- Global leisure stocks and hotels had a good run last year, and they may continue to outperform. Online searches for reservations in Paris this Spring revealed that more than 20 hotels are charging at least $1,000 per night for entry-level rooms. In London, 13 hotels reached that threshold, while a dozen did in New York. From 2019 to the end of 2022, luxury room rates rose by 35% in Europe and 28% in North America.
- Short-term rates for container shipping between Asia, Europe, and the United States are rising due to reduced capacity caused by conflict in the Red Sea. The spot rate for shipping goods in a 40-foot container from Asia to northern Europe now exceeds $4,000, marking a 173% increase since the diversions began in mid-December due to the conflict in the Red Sea, as reported by Freights.com, a cargo booking and payment platform. Higher shipping costs may impact the profit margins of many retailers.
- Morgan Stanley has reduced its year-end targets for major Chinese stock indices. The group lowered the year-end target for the MSCI China Index from 63 to 53, citing slower earnings growth and changes in valuation assumptions, according to FactSet. The current stimulus announced by the People’s Bank of China (PBOC) may not be sufficient to support the property market and boost the stock market.
Energy and Natural Resources
- The best performing commodity for the week was natural gas, jumping 10.08%, on a late spike in price Friday afternoon with WTI crude oil, rising 6.68%, on mounting tensions after the U.S. and UK launched more air strikes against Houthi rebels in Yemen. Lower U.S. stockpiles and prospects for more stimulus in China helped to lift crude prices above the 200-day moving average for the first time since last November, reports Bloomberg.
- London Metal Exchange aluminum prices rose as much 3% to $2,224 a ton, following a report from Politico stating that Russian aluminum products are among the goods in focus for the EU’s next sanction package on Russia. Countries are hoping to agree on the package before the two-year mark of Russia’s full-scale invasion of Ukraine next month, Politico explained, citing EU diplomats.
- Uranium investment firm Yellow Cake Plc said the estimated value of its assets jumped to $2.3 billion after a breakneck rally in prices. The London-listed firm — which started in 2018 with assets of $200 million — passed the $2 billion milestone this month as prices jumped to a 16-year high, it said in a filing on Wednesday. The estimated value includes purchases due to be delivered this year by Kazatomprom, the world’s largest uranium producer. Yellow Cake’s rapid growth gives it a significant presence in the uranium market, alongside Sprott Asset Management, which runs the world’s largest investment fund for the commodity.
- The worst performing commodity for the week was uranium, as proxied by the Sprott Physical Urainum Trust, dropping 9.74%. Uranium prices have doubled in value over the past year with investors witnessing profit taking as supply remains tight. Libya’s largest oil field countered concerns about tensions in the Red Sea that look set to keep disrupting shipping. Libya’s National Oil Corp. said that flows from Sharara — which previously pumped about 270,000 barrels a day — would resume after a three-week stoppage but remain at low levels.
- According to BMO, following almost a month of stability, the spot HRC steel prices in the U.S. declined slightly over the past two weeks to $1,090 per ton, with the decline driven by sluggish spot market activity coupled with increasing spot supply resulting in some mills reducing offers.
- According to Bank of America, tin prices have been on an upward trend for a while now, since the early 2000s, when the metal was trading just around $4,000 per ton. Given the persistent tightness in the tin market, a new floor seems to have been set around $25,000 per ton. Low inventories in LME warehouses also made the metal prone to violent squeezes, with cash-to-3M spreads rising above $1,000 per ton multiple times in the past three years. Given the small size of the tin market, investors, which account for only about 5% of trading volumes, can have an outsized impact on metal prices and spreads, so it would be safer not to speculate trading the metal in leu of finding a company that might have exposure to producing the metal.
- According to Bank of America, as nearby copper has remained broadly range-bound, prices further out have been under pressure, so forward curves have flattened visibly. This looks to have been influenced by strategic hedges.
- According to Bank of America, most chemical sales are executed under monthly or quarterly contracts. The bank’s channel checks suggest negotiations for the next settlement are now moving in favor of producers and pricing is set to go higher across many products. It will vary, but as a rough indication, a doubling of freight rates requires a 10-20% increase in European chemical prices; otherwise, the bank thinks Asian imports will not be economically viable.
- Iron ore and copper rose along with other asset classes after China unveiled a plan to cut the reserve requirement ratio for banks to boost liquidity and bolster the economy in the world’s top commodity consumer. A 0.5 percentage-point cut in the ratio, the amount of cash that banks must keep in reserve, will provide 1 trillion yuan ($139 billion) in long-term liquidity to the market, Chinese central bank governor Pan Gongsheng said at a media briefing Wednesday.
- Two Australian resource-rich regions are bracing for potentially damaging storms that could lead to flooding, the latest threats after months of extreme weather events. A tropical low in the Coral Sea off Queensland state is likely to become a cyclone, the nation’s Bureau of Meteorology said. The system is expected to cross the coast around the middle of the week, with a severe impact likely. If the storm crosses the coast, the bureau expects it to weaken and move further south over land, which may trigger heavy rainfall near coal-mining regions.
- China’s exports of natural graphite, a material used in electric vehicle batteries, plummeted in December after Beijing imposed controls at the start of the month, tightening its grip on the supply of minerals vital to advanced manufacturing. Overseas sales plunged 91% month-on-month to 3,973 tons, according to Chinese customs data, after a rush to buy ahead of the deadline saw them surge to more than 45,000 tons in November. Exports had averaged about 17,000 tons a month in the year through October.
- A prolonged slump in nickel prices is stress-testing producers worldwide, raising the prospect of sweeping mine closures that will deepen Indonesia’s dominance of global supply. The metal used in stainless steel and electric-vehicle batteries is down more than 40% from a year ago amid a growing global glut. That is piling pressure on higher-cost operations and could pose the greatest risk to new projects outside Indonesia.
Bitcoin and Digital Assets
- Of the cryptocurrencies tracked by CoinMarketCap, the best performer for the week was Manta, rising 36.50%.
- BlackRock’s iShares Bitcoin Trust and the Fidelity Wise Origin Bitcoin fund are leading the field with about $1.9 billion and $1.6 billion of inflows. That’s roughly a combined 70% of spot Bitcoin ETF inflows so far, writes Bloomberg.
- Bitcoin rose past $41,000 this week amid a slowdown in outflows from the $20 billion Grayscale Bitcoin Trust that strategists said may help to stanch a two-week slump in the token, writes Bloomberg.
- Of the cryptocurrencies tracked by CoinMarketCap, the worst performer for the week was Ordi, down 16.40%.
- Crypto lender Nexo AG said it had filed an arbitration claim worth more than $3 billion against Bulgaria, following the end of an investigation into its activities that saw its office there raided and four people charged. The claim was submitted to the Secretariat of the World Bank’s International Centre for Settlement of Investment disputes in Washington, according to Bloomberg.
- Coinbase Global fell 4.4% premarket on Tuesday after JPMorgan cut the recommendation on the cryptocurrency platform operator’s stock to underweight from neutral. The broker says the enthusiasm surrounding cryptocurrency ETFs has the potential to deflate further, writes Bloomberg.
- The UK will step up work on designing a digital version of the pound as officials sought to quell privacy concerns among the public and address criticism from banks. The Treasury and Bank of England said further study of a so-called Central Bank Digital Currency is needed before a final decision can be made, writes Bloomberg.
- Crypto bank Sygnum AG raised 35 million Swiss francs to fund expansion and acquisition plans as the group looks at stepping up its presence in new geographies. The investment was led by asset manager Azimut Holding and comes at a valuation of about 725 million Swiss francs, writes Bloomberg.
- Coinbase Global rose 4.7% in the pre-market on Friday with crypto stocks broadly rising amid a gain in Bitcoin, after Oppenheimer raised the recommendation to outperform from market perform, writes Bloomberg.
- Bitcoin has fallen over 20% since the January 11 launch of the first exchange-traded fund investing directly in the token as speculators become more cautious about the potential impact of the products, writes Bloomberg.
- The lawyer convicted of laundering $400 million from the OneCoin cryptocurrency fraud was sentenced to 10 years in prison. March Scott was found guilty in November 2019 of laundering money from a massive $44 billion international fraud. Prosecutors claimed Scott made $50 million for setting up a phony investment fund that he used to process money, writes Bloomberg.
- Hardware wallet provider Trezor has reported an unauthorized phishing attempt aimed at its users. The attack involved malicious email impersonating Trezor and urging users to upgrade their “network” or risk losing their funds. The company has deactivated the malicious link and advised affected users to transfer their funds to new wallets, writes Bloomberg.
This week gold futures closed at $2,037.40, down $11.20 per ounce, or 0.55%. Gold stocks, as measured by the NYSE Arca Gold Miners Index, ended the week higher by 1.56%. The S&P/TSX Venture Index came in off 0.27%. The U.S. Trade-Weighted Dollar rose just 0.15%.
- The best performing precious metal for the week was platinum, up 1.56%. Both platinum and palladium were up this week despite hedge funds boosting their net short position to record highs on palladium and flipping to net short on platinum. According to RBC, Iamgold Corp. fourth quarter attributable production of 136,000 ounces was 20% above consensus of 113,000 ounces. At Essakane, outperformance was driven by higher tonnage and grades following increased stripping activities and supply disruptions in the third quarter. Westwood also had a strong close to the year, driven by higher grades, exceeding fiscal year guidance.
- Cour Mining, Inc. released an extremely high-grade intercept from its Silver Tip deposit. Results have been received for almost half of the total 2023 drilling at the Southern Silver Zone, including the highest-grade intercept ever received in the zone.
- Harmony Gold says gold output rose to range of 820,000 ounces to 835,000 ounces in the first half through December 31. All-in sustainable costs for the period are 830,000 rand per kilogram to 855,000 rand per kilogram, below the guidance of 975,000 rand. The increase was driven by South African underground recovered grades exceeding the upper end of the guided range, a strong performance by the South African surface-source operations, and an “excellent” operational performance from Hidden Valley in Papua New Guinea.
- The worst performing precious metal for the week was gold, down 0.55%. Mixed data is keeping the debate alive over the timing of the Fed’s next interest rate change as gold has chopped sideways but remains above $2,000 per ounce in price. Endeavour Mining reported fourth-quarter 2023 gold production of 280,000 ounces, down from 294,000 ounces in the year-ago quarter. For the full year 2023, Endeavour posted gold production of 1.07 million ounces, an 8% decrease from 1.16 million ounces in 2022.
- More than 70 people were killed after a tunnel collapsed at an unregulated private Malian gold mining site last week, a local gold mining group leader and a local official told AFP on Wednesday.
- B2Gold’s share price dropped as much as 11% this week, the most intraday since March 2020. The fall came after the miner forecast full-year gold production of 860,000 to 940,000 ounces and higher-than-expected capital expenditures at its Goose project.
- According to Raymond James, Perseus Mining announced it has made an all cash, off-market takeover offer for OreCorp. The A$0.55/share cash offer is a 4% premium to Silvercorp’s offer of A$0.19/share + 0.0967 SVM share based on last Friday’s closing price. OreCorp has notified Perseus that the offer is not considered to be a superior proposal and the Board has not changed its existing unanimous recommendation in favor of Silvercorp’s current offer.
- Arizona Metals Corp. said Monday that it plans to create two new companies by spinning out the Sugarloaf Peak Gold Project and two newly-created royalties on its Kay Mine Project. The first company, expected to be called “Sugarloaf Gold Corp.,” will be transferred shares of the company’s wholly-owned subsidiary, which holds Arizona Metals’ Sugarloaf Peak Gold Project. The second company, expected to be called “Arizona Royalties Corp.,” will hold a newly-created 2% net smelter royalty on any potential future mineral production at Arizona Metals’ Kay Mine Deposit, as well as a newly-created 2% NSR royalty on all future potential mineral production (from any new deposits discovered through Arizona Metals’ ongoing exploration activities at the Kay Mine Project).
- In Johannesburg, illegal miners and mining companies are in a race to tap golden riches hidden in hundreds of heaps of mine waste, many taller than a 20-story building, reports Yahoo! Finance. The hills that scar the city’s landscape are now coveted by South African mining companies whose underground gold deposits have become harder to exploit with every passing year. The region is dotted with slag heaps, shafts and deep trenches left by generations of miners, whose arrival in a gold rush in the 1880s led to the birth of the city.
- Workers at Endeavour Mining Plc’s second-biggest gold mine have downed tools and blocked roads at the site in Burkina Faso, in the latest setback for a company that recently fired its chief executive, reports Bloomberg. An “unplanned” and “illegal” stoppage began disrupting operations at the Hounde gold project on January 21, according to an internal memo sent to mine employees on Monday and seen by Bloomberg. Endeavour was yet to receive a list of grievances that “would enable negotiations to take place,” the document said.
- According to Scotia, for Hecla Mining, attributable silver production of 14.2 million ounces in the fourth quarter of 2023 came in 10% below the group’s 15.8 million ounces forecast. Gold production of 152,600 ounces increased 15% quarter-over-quarter but declined 9% year-over-year and fell 3% short of the156,900-ounce estimate.
- CIBC has little clarity on whether the outcome of B2Gold’s constructive discussions with the Government of Mali will yield a viable option for the Fekola Regional ore which would impact the NAV for Fekola. The Fekola uncertainty, in combination with headwinds associated with a heavy-lifting year at Goose, causes them to await further visibility on Fekola, progress on the Goose 2024 ice road shipping and 2024 sealift, and finally the Gramalote PEA in the second quarter of 2024.
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