True Gold Mining Reports Q2 Results

True Gold Mining Reports Q2 Results

By: Dylan Sikes - News

Tuesday, August 25, 2015

Gold prices have come under pressure since the start of this year amid speculation that the Federal Reserve will hike interest rates. Gold saw a multi-year rally, which was driven primarily by the Federal Reserve’s ultra-loose monetary policy. In the last two weeks though, gold has once again found favor among investors. Indeed, during the current sell-off in equities, gold prices actually edged higher. In the last five trading sessions, the SPDR Gold Trust ETF (NYSE:GLD) has gained more than 2%.

The reason for this is that the current turmoil in financial markets has raised the question whether it would be appropriate for the Fed to raise rates. Several analysts believe that the rate hike will not happen this year in the wake of recent events.

In addition to the Fed possibly delaying a rate hike, China is flooding the market with additional liquidity as it looks to provide support to its slowing economy. China has already cut interest rates and reserve requirements for banks multiple times this year. And there is speculation that more measures will be introduced in the coming weeks.

All these developments could provide support to gold prices, going forward. This augurs well for miners such as TrueGold Mining (TSX-Venture:TGM), a mineral exploration company focused on exploring and developing gold projects in West Africa.

This morning TGM reported its financial results for the second quarter of 2015. The company reported a net loss of $4.2 million for the quarter, down from $6.1 million reported for the same period in the previous year. For the six-month period ended June 30, 2015, TGM reported a loss of $11.1 million, up from $10 million reported for the same period in the previous year. The company said that the most significant contributor to the loss for the six-month period was the impairment recognized on assets damaged during the demonstrations at the Karma Mine.

TGM’s total assets as of June 30, 2015 were $96.7 million, down $13.4 million from December 31, 2014. The decline was mainly due to decrease in total cash and short-term investments, which reflects the cash outflows from operations during the reported period.

TGM also provided an update on its operations. The company said that its Karma Mine is in full construction with more than 600 staff on site. The mine is on track for first gold pour by the end of first quarter of 2016.

Shares have had a rough year, in fact currently trade around its 52 week low of $0.18 as investors wait and hope for better times ahead.

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