ASX-listed South African Gold Stocks Continue to Offer Sound Value

The usual quiet period after June, when school holidays dominate the calendar, is with us again. It is all part of "sell in May and go away". Business still happens but without an underlying sense of urgency. So, we have taken the time to have a look at South Africa. Specifically there are two gold stocks that I have covered previously that need an update; Theta Gold Mines and West Wits (WWI). Both are still waiting to be embraced by the market.

The attitude of investors towards South Africa has, and continues to be, most anomalous. You cannot say anything else when an established ASX-listed gold producer declines to participate in the redevelopment of a 5 Moz gold project in South Africa because it considers the country to be too high risk, yet that same company decides to develop a gold mine in Sudan. Most anomalous.

There is the BEE requirement for local companies to have a 26% carried interest in projects. That can be annoying but the rules are well understood. They can easily be factored into valuation and shares can be priced accordingly. Yet, there is still prejudice in the minds of investors. South Africa is not perfect but it has the best infrastructure in sub-Sahara Africa. It has one of the most advanced mining infrastructure and communities in the World. There is a British-based rule of law and a democracy that has never experienced a coup, yet there is a bias against the country. It is frustrating for the Australian companies who struggle to get market recognition for their projects. 

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