Asia Metals Inc., the wholly owned subsidiary of Asia Broadband Inc. ($AABB), announced this week that it has confirmed its highest ever gold production and gross profit in the period ended at September 30. And that in a time when the gold price is expected to rise, especially after the presidential elections in the United States. With the release of the third quarter results, the annual gross profit budget has been adjusted to more than $14 million by 2020.
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In the first quarter of 2020, the gold production more than doubled compared to the fourth quarter of 2019. This is due to higher daily throughput levels and the efficiency of metal extraction. Asia Metals has achieved this with the help of the new production facilities that started the operational phase-in process early. The third quarter is the first full quarter in which they have benefited from the growing possibilities regarding the production and efficiency. An announcement followed in which the company predicts a tripling of its gold production level by 2020. The added operational capacity of the company must make the greatest contribution to this.
External factors that increase AABB’s potential
Analysts expect precious metals like gold and silver to do better after the presidential election in the United States. The market positioning and price increase will mainly be determined by the specific tax and social policy initiatives. This is a high-potential development for Asia Broadband, as shareholders keep noticing that bullish gold prognosis continue.
In this turbulent year the economic conditions have provided special and promising foundations for the shares of gold producers. During the COVID-19 pandemic, it has become very clear how economic volatility, inflationary effects and other uncertainties have helped gold producers into an important growth phase. While the oil market is currently in decline, it brings the gold-to-oil ratio to a record high. A strong advantage for the gold producers who can count on lower production costs and higher profit margins.
From an economic and political point of view, the approval of a US aid package regarding the COVID-19 pandemic is another reason for a rise in the price of gold. With the holidays ahead physical demand is on the rise, with a gold price expected to reach $2,300 per ounce in early 2021.
Crypto vs Gold: Asia Broadband will work with both
A new research report from The World Gold Council claims that cryptocurrencies are more popular than gold among investors in several countries. The report focuses primarily on the gold market, comparing and ranking various popular investment instruments. The discussion whether gold or cryptocurrencies are a better store of value has been going on for some time.
Last week, the wholly owned subsidiary Asia Metals announced that the company is in the final stages of negotiating the terms of a development agreement with a maker of digital assets and a crypto wallet to produce an in gold-backed cryptocurrency coin. This means that the company will be active on two fronts, realizing a greater reach and potential within both competitive markets. Further details on the gold-backed cryptocurrency project are expected in the coming weeks.
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