Since mid-January gold prices have been trading sideways, with only a 4.6% gain over that time to about US$1,298 per ounce. Even the S&P/ASX 200 Index (ASX: XJO) beat that with a 5.3% rise.
But someone forgot to tell that to these four gold miners because during the same time they climbed more than 30%! The market mantra had been “gold down, miners down”, but those investors who stuck to the story rather than the headlines have made some impressive returns.
When gold stabilises, the story turns back to what each miner is doing. As a commodity, gold is like milk or a litre of petrol. Miners can’t control the price, so they make gains by cutting costs and selling higher volumes.
— Newcrest Mining Limited (ASX: NCM)
The largest ASX-listed gold miner has climbed almost 31% since mid-January. It officially opened its new Cadia East mine in May and gold production for its whole Cadia Valley operation is expected to rise to 700,000 ounces in FY 2016 and even more in FY 2017. It has a dividend yield of 1.1% unfranked and its 23 price/earnings ratio is at the lower range of its historical PE average.
— AngloGold Ashanti Limited (CHESS) (ASX: AGG)
The multi-national miner has increased gold production through its new Tropicana mine in WA, in which it owns a 70% stake. In the first three years of production, estimates are the mine will produce about 470,000 – 490,000 ounces annually. The stock has risen about 36% and offers a 1.6% yield unfranked.
— Northern Star Resources Ltd (ASX: NST)
The stock is up a whopping 82% from $0.95 to $1.73. The WA miner announced in June its Pegasus project resource has more than doubled, which is forecast to add 50,000 ounces per annum production by mid-calendar year 2015. That will increase the total Kundana project’s (51% owned by NST) annual production to about 125,000 ounces. Its dividend yield is 1.6% fully franked.
— Independence Group NL (ASX: IGO)
This company mines gold, zinc, copper and nickel and is also 30% owner of the new Tropicana mine in a joint venture with AngloGold Ashanti. Its share price has climbed more than 48% since mid-January. In early July, it announced that production was more than expected, pushing up the stock to a new 52-week high of $4.90. Tropicana mine production was up 10% on the March quarter for the joint venture. The dividend yield is 1.0% fully franked.
Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned.
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