Key Takeaways:
Gold is starting to shine…
As a safe haven, gold shines brightest amidst economic and political strife. And this glow-up could just be starting…
Bullion has eclipsed $2,000 an ounce and it averaged a stellar $1,928 in Q3 – a 12% surge year over year.
But not all that glitters is gold for mining stocks.
Costs are erupting, talent is scarce, and existing reserves are dwindling. Developing new mines takes years – if not decades – emphasizing the need for new growth strategies.
That’s why gold explorers are getting creative – adopting "green" energy to lower energy costs, deploying AI to better target potential deposits, and implementing advanced analytic analysis.
A lack of new major discoveries is also why larger producers are looking to make acquisitions as a primary growth strategy. They’re buying-up smaller gold companies with proven mine sites and high potential exploration projects to shore up reserves.
Gold demand (excluding OTC) in Q3 was 8% ahead of its five-year average.
Central banks also maintained buying gold at a historic pace this year – snatching up 337tonnes for the third strongest quarter on record.
And gold remains an integral part of celebrations and culture in China, India, and other nations.
The one-two punch of constrained supply and spiking demand is setting the stage for a prolonged gold bonanza. But are you prepared to capitalize on this potential mother lode?
Today we’ll look at three gold stocks that are set to thrive as prices rise: Barrick Gold (Ticker: GOLD), SSR Mining (Ticker: SSRM), and Coeur Mining (Ticker: CDE).
Barrick Gold Corporation is a leader in gold and copper mining.
The company exhibits a robust strategic position in the mining industry with a focus on efficient production and sustainable practices. Its ability to increase production while maintaining lower costs reflects operational excellence and adaptability in a dynamic market.
Barrick’s emphasis on long-term growth and value creation, supported by a strong balance sheet, positions it well for enduring success in the gold mining sector.
Barrick Gold reported a progressive increase in revenues over the last three quarters, from $2.64 billion to $2.86 billion, with a quarterly average growth of 3.9%.
The company's net profit experienced a significant reversal, transitioning from a deficit of $816 million to a surplus of $368 million across four quarters, representing an average growth of 145.1%. This notable improvement in financial performance can be attributed to increased gold and copper production achieved at reduced costs.
Additionally, there is an anticipation of further enhancement in production during the fourth quarter.
SSR Mining Inc. distinguishes itself in the gold mining industry with its impressive trajectory of growth and operational efficiency.
SSR Mining's robust production numbers, particularly at its Marigold mine, underscores its capacity to optimize output and manage costs effectively. The company's strategic emphasis on high-return growth projects, such as the Çakmaktepe Extension and the Hod Maden project, demonstrates a clear vision for sustainable expansion and value creation.
This forward-thinking approach, coupled with a strong commitment towards responsible mining and environmental stewardship, positions the company favorably for future growth and profitability in the dynamic gold mining industry.
SSR Mining showcased strong operating results in the third quarter of 2023.
Consolidated production reached 192,195 ounces of AuEq (Gold Equivalent), continuing on an upward trajectory towards the annual production target of 700,000 ounces AuEq.
The financial performance for Q3FY2023 included an attributable net income of $15.2 million, or $0.07 per diluted share, and an adjusted attributable net income of $53.0 million, or $0.26 per diluted share.
Furthermore, the company generated significant operating cash flow (at $135.3 million) and free cash flow (at $87.8 million), reinforcing its solid financial standing. At the close of the quarter, the company reported a total cash holding of $437.7 million. When accounting for net cash, which stood at $206.9 million, the firm's overall liquidity position is notably strong, amounting to $937.8 million.
Coeur Mining Inc. (NYSE: CDE) presents an attractive investment opportunity in the precious metals sector.
As a U.S.-based, diversified precious metals producer, Coeur has demonstrated a robust performance in its recent quarterly results. The company's strategic focus on expanding and optimizing its key operations, notably the Rochester mine in Nevada, aligns with its goal of increasing production efficiency and reducing costs.
Coeur's balanced approach to capital investment, efficient operational management, and ongoing exploration initiatives advantageously position it for sustainable growth in the gold and silver markets
Revenue for Q3FY2023 reached approximately $195 million, a significant increase of 10% from $177 million in the previous quarter.
This increase is attributed to a 15% quarter-over-quarter increase in gold production and a 13% reduction in adjusted costs per gold ounce. While the company posted a net loss of approximately $21.1 million in Q3FY2023, this being an improvement over the approximate $32.4 million net loss in the previous quarter, indicating a 53.6% upward shift.
With upbeat gold prices, these companies provide great investing opportunities for the short to medium term.
Each showcases strong operational capabilities and strategic growth initiatives underpinned by solid financial results and potential for continued expansion.
For those looking to capitalize on the current momentum in the precious metals sector, Barrick Gold (Ticker: GOLD), SSR Mining (Ticker: SSRM), and Coeur Mining (Ticker: CDE) merit consideration.
But remember, investing is never a sure-shot bet. Always do your homework while even getting some advice from a financial professional to make sure these options fit your own risk appetite and financial goals. As with any investment, aligning choices with your personal risk tolerance and financial objectives is key to making informed decisions.
Q: Why is the gold exploration sector at an important point currently?
A: Strong gold prices, supply constraints, and rising costs are driving a focus on efficiency and acquisition of existing reserves rather than new exploration.
Q: How has Barrick Gold demonstrated operational excellence recently?
A: By increasing gold and copper production while keeping costs low, resulting in stronger cash flows to support growth projects.
Q: What makes SSR Mining well-placed in the gold mining industry?
A: Optimizing output at mines like Marigold, pursuing high-return growth projects, and converting resources to reserves to sustain production.
Q: What are the key drivers of growth for Coeur Mining?
A: Completing the Rochester expansion to boost output, enhancing production and cost efficiency, and strategic exploration to expand reserves.
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