ASX gold stocks are getting hammered

The S&P/ ASX All Ords Gold Index — made up of gold miners, explorers and gold developers — is down over 18 per cent in the last six months, despite the gold price falling by only less than 5 per cent, from around US$1,750 per ounce in October 2011, to around US$1,663 currently.

Over the same period the S&P/ASX Industrials Index has risen over 10 per cent.

The gold price has fallen back as Europe and the US muddle through their issues, with the world’s top economies appearing to have pulled back from the brink of GFC Mark II.

The ASX’s largest listed gold miner, Newcrest Mining Limited (ASX: NCM) has seen its share price fall 23 per cent in the last six months, and over 37 per cent in the last year, from a high of $42 to now be trading around $26.30.

Six-monthly performance of the top ten gold miners


Six month % change

Market Cap Current price Current PE
Newcrest Mining Limited (ASX: NCM)

Down 23%




Regis Resources Limited (ASX: RRL)

Up 37%




Evolution Mining  (ASX: EVN)





Perseus Mining Limited (ASX: PRU)

Down 20%




Resolute Mining Limited (ASX: RSG)

Down 4%




Medusa Mining Limited (ASX: MML)

Down 16%




Kingsgate Consolidated (ASX: KCN)

Down 21%




St. Barbara Limited (ASX: SBM)





CGA Mining Ltd (ASX: CGX)

Down 8%




Silver Lake Resources Limited (ASX: SLR)

Down 1%




Source: Google Finance

Regis Resources is the only stock up out of the top ten, with the company expected to triple gold production from 2012/2013, from 100,000 ounces to over 300,000 ounces. The company reported its first net profit in 2011 of $36m, with analysts predicting revenues to hit over $550m in financial year 2013, and earnings per share to rise from 14 cents in 2011, to over 60 cents in 2013. With cash costs expected to fall below $500 per ounce, the company is fairly well protected from a significant fall in the gold price. All of that good news appears to have been priced in, with the stock trading on a P/E ratio of over 30.

The price of gold is not the only factor that can affect the price of gold miner’s shares. Gold supply and demand, weather events, management decisions, accidents, diesel costs, taxes and political decisions are among the many influences on share prices.

Several of the companies above may have been afflicted by some of these factors as well as the slide in the gold price.

Foolish takeaway

For the gold bulls out there, the steep price declines of some of the gold stocks above, relative to the price of gold, may offer a chance to get back in.

For the gold bears, this article provides some evidence of the risks in investing in gold stocks, and to steer clear of gold mining stocks and focus instead on industrial stocks.

The ASX is already on the move in 2012, and Goldman Sachs experts recently said they reckon S&P/ASX 200 could top 5,000 next year. Read This Before The Coming Market Rally is a must-read for investors who don’t want to miss out on the party. Click here now to request your free copy, before it’s too late

More reading

Motley Fool contributor Mike King owns shares in Kingsgate Consolidated. Take Stock is The Motley Fool Australia’s  free  investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  Click here now  to request  your free subscription , whilst it’s still available. This article contains general investment advice only (under AFSL 400691).

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!