It’s great news that stock markets are bouncing off their recent lows. But investors need to be mindful that they could be swept lower again as the coronavirus continues its global spread.
The infection rate here in the UK certainly continues to accelerate. Health minister Matt Hancock has just announced that the number of confirmed cases has spiked to 51 from 39 early on Monday. A report released by the OECD yesterday illustrates the threat that COVID-19 poses to the global economy. Bear in mind, though, that the pandemic is still in its early stages. Things could end up being much worse than is currently forecast.
It pays, then, to keep investing in safe-haven shares. In my opinion there’s plenty of scope for these to continue rising as worries over the coronavirus — as well as the macroeconomic issues spilling over from 2019 like Brexit and trade wars — continue to play on market nerves.
One brilliant flight-to-safety asset I’d buy today is Greatland Gold (LSE: GGP). It’s not that the precious metals producer is a great play on the likelihood of strong bullion prices in 2020. This Australia-focused digger is a great buy because of strong news flow on the exploration front.
Most recently Greatland released exciting news concerning its Havieron asset in Western Australia. It said that mining giant Newcrest Mining — which has a farm-in agreement to explore and develop Havieron — has raised the number of rigs working at the site to eight, up from six previously.
Newcrest, which has the right to earn up to a 70% interest in a 12-block area within E45/4701 that covers Havieron (providing it spends $65m on the project), is looking to start an exploration decline by the end of the year, Greatland says.
This is not the only news to have cheered investors of late. In early February it announced that it had intersected a high-grade gold mineralisation at its Derby North prospect at the Warrentinna project in Tasmania. The results of this maiden diamond drilling programme are now being evaluated to assess the asset’s potential.
Greatland has also released positive data from its Firetower drilling programme in Tasmania, another asset in which it has been investing aggressively. Testing here either side of the New year has revealed that there is “growing potential for a robust, near-surface gold system.” Work has shown “additional broad widths of shallow gold mineralisation,” as well as zinc and silver mineralisation at Firetower East.
Investing in any sort of commodities producer is a risky business. Exploration and production results can often disappoint and prompt huge share price downgrades.
Greatland, however, really has the bit between its teeth right now. And the prospect of more gold price strength as the coronavirus tragedy — along with a series of other geopolitical and macroeconomic issues — persists makes the digger a top buy too, I think. It’s why the share price has leapt 150% since the start of 2020 alone. I’d happily buy this share to protect myself in the current climate.
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.