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Saracen Mineral Holdings Limited shares sink lower as gold price falls

Saracen Mineral Holdings Ltd (ASX: SAR) is back on A downward spiral after a brief honeymoon last week.

The mineral exploration and development company, with a stronghold in Western Australia and widespread recognition for its Carosue Dam Operations assets, certainly looks good on paper.

But its share price has been on a downward drag, recently amongst the leading S&P/ASX 200 (Index: ^AJXO) (ASX: XJO) fallers as the gold price began the week down more than 1%.

If Macquarie Group Ltd’s (ASX: MQG) December 1 research is anything to go by the future is rosy for Saracen Minerals, with the ROE forecast in 2018 solid at 28.9%.

The company’s quarterly report on January 17 looked good too – showcasing a debt-free, cash-positive, production-robust company backed up by BMO Capital Markets and RBC Capital Markets both suggesting a price target of $2.

But a run of falls totalling more than 12% in the last fortnight and the continuing downward trend won’t do much for shareholder sentiment.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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