Gold miners have posted a strong start to Monday trading, as gold surges above its six-month high price.
The political issues in the Ukraine have buoyed investor appetite for the gleaming metal – gold tends to do well during times of unrest. An ounce of gold was selling for US$1,383.80 yesterday, the equivalent to more than $1,500 an ounce.
But there are smaller and potentially better fish to fry in the gold sector, such as these three.
Beadell Resources (ASX: BDR)
One of the lowest cost producers in the world, Beadell operates the virtually brand new Tucano mine in Brazil, with the cash cost of production of around US$470 an ounce in the December quarter. Add in a low corporate tax rate of 15.75% in Amapa state, a very low 1% gold royalty rate, a 10 year mine life from just open pits, increasing production, and Beadell is one gold stock you might want to add to your watchlist.
Doray Minerals (ASX: DRM)
A company I mentioned back in February as possibly the lowest cost producer in Australia. With all in sustaining production costs of $949 an ounce, Doray is primed to excel as the gold price inches higher. At current prices of $1.02, Doray could be as cheap as chips.
Silver Lake Resources (ASX: SLR)
With two operating plants and several mines at Mount Monger, Silver Lake has the potential to ramp up production quickly, should the gold price surge even higher. Having recently put its Murchison operations on care & maintenance, it too could be brought back into production if needed. With all in sustaining cash costs of around $1,070 an ounce, and guiding to produce between 205,000 and 220,000 ounces of gold for this financial year, Silver Lake mat be set to surprise investors when it reports in August.
For investors, taking a diversified approach to investing in gold miners would make common sense. That means buying a portfolio of gold stocks could limit the downside from any one company – but obviously not if the gold price slides.
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Motley Fool writer/analyst Mike King owns shares in Beadell Resources and Silver Lake Resources. You can follow Mike on Twitter @TMFKinga