Argonaut Algorithm: The big takeaways from gold’s quarterly season and a spooky Halloween buy - STOCKHEAD29 Oct 2025 06:41
Argonaut Funds Management’s David Franklyn joins Stockhead to share investing secrets from the high-conviction resource sector investing fund, including his junior stock pick of the month.
Gold prices have run 30%, or to put it in more startling terms, US$1000/oz in just two months leading up to the past fortnight’s reporting season.
Equities have followed that move up and then some. With a rising tide floating all boats, how do you sort the wheat from the chaff?
Argonaut Funds Management’s David Franklyn says with relative value being squeezed, the WA stock picker is looking closely at free cash flow yield as a measure of health in Australian gold businesses....
“In general, I think the other aspect is there’s a lot of companies now that have a shedload of cash,” Franklyn said.
“You’ve got Greatland with about $800 mil… Regis and Ramelius are up there – they’re $700, $800, $900 million. Even a Genesis has got $300 million or something like that....
QUARTERLY WINNERS
....Also in the good books is Greatland Resources (ASX:GGP), which put concerns about a guidance cut behind it with 81,000oz of gold and 3400t of copper production at the Telfer gold mine in WA’s Paterson Province.
“Operationally it really impressed that they increased their recoveries from 82% to 88%. That was a good effort,” Franklyn noted.
“So their guidance, they’re still on track for that, which is between 260 and 310,000oz.
“AISC was at the lower end of guidance – $2100/oz. So their cash build over the quarter after capex, where they’re spending some money on drilling, was $187 million – an annualised free cash flow yield was 17% which is enormous.
“It just shows that the benefit of the transaction they did (with Newmont) when they got the stockpiles and the ability to mine straight away is just generating a whole lot of cash.”
With around $750m in the bank, Franklyn thinks Greatland should be able to develop its Havieron underground with its own reserves – a study is due early December.
That development could see Greatland lift production to 400,000oz by 2029.
https://stockhead.com.au/resources/argonaut-algorithm-the-big-takeaways-from-golds-quarterly-season-and-a-spooky-halloween-buy/
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