This article only represents the author's own views.
The U.S. Federal Reserve’s new easing cycle is proving not only good news for home buyers and businesses, which are sensitive to high interest rate. Another big beneficiary may be gold miners, which can benefit as demand for the precious metal rises from investors looking for better returns as bond rates fall. As the Fed continues to cut rates, some analysts are expecting gold to breach the $3,000 per ounce mark, which could help names like Zijin Mining Group Co. Ltd. (2899.HK; 601899.SH), China’s leading gold miner. Anticipating strong demand, Zijin has made several acquisitions this year, including its recently announcement of one in the South American nation of Peru.
According to its announcement earlier this month, the company plans to purchase La Arena for $245 million. La Arena owns two mining projects, the first a heap leach gold mine currently in production, while the second is a porphyry copper and gold project still in the exploration stages. The first mine, La Arena I, contains gold at an average grade of 0.33 grams per ton, while the second, La Arena II, averages 0.24 grams per ton.