The share prices of the 3 major ASX gold miners below were higher on Monday following a lift in the gold price. Additionally, they were boosted by reports that the wealthy have been buying up gold, which could suggest a strong rally is coming. Lately, the gold price has also been supported by the decision of the US federal reserve to continue its quantitative easing as the world economy works through the current recession.
If your bullish on gold prices, gold mining companies are a great way to gain exposure. As the gold price moves higher they generally see an increase in sale prices of the precious metal. This boosts profits for shareholders.
Newcrest Mining Limited (ASX: NCM)
The Newcrest Mining share price was up 3.69% on Monday. Newcrest has operations in Australia, Canada, Ecuador and Papua New Guinea. In Q3 of the 2020 financial year, Newcrest produced 519,000 ounces of gold. Its margin on this production was $742 per ounce. Since the end of March, the gold price has recovered more than 15%. This means that we can expect the margins that Newcrest receive to be significantly higher in the current period.
The Newcrest mining share price has recovered almost 50% from its 52 week low of $20.70. It is up 3.25% since the beginning of the year.
Saracen Mineral Holdings Limited (ASX: SAR)
The Saracen Mineral Holdings share price is up 8.47% on Monday. Saracen is a reliable gold producer and has an impressive 7-year track record of meeting or beating its production guidance. Its production guidance for the 2021 financial year is 600,000 ounces or more. If higher gold prices remain this will fetch over $1.5 billion in revenue for the miner.
The Saracen Minerals share price is up 84% from its 52 week low of $2.81. Since June 2015, the Saracen Minerals share price has increased more than 10 fold from $0.45 cents to $5.17 on Monday.
St Barbara Ltd (ASX: SBM)
The St Barbara share price was up 5.96% on Monday. This comes as investors rush into shares offering exposure to the precious metal. St Barbara has operations in Australia, Canada and Papua New Guinea. When St Barbara presented to analysts in May, it forecast that it would produce 385,000 ounces of gold in the 2020 financial year. This is lower than its usual production over the last 5 years and if the miner can boost production at a higher gold price, it could see significantly higher profits for shareholders.
The St Barbara share price is up 98% from its 52 week low of $1.615. It has returned 17.2% since the beginning of January.
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Motley Fool contributor Chris Chitty 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 Scott Phillips.
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