Australian (ASX) Stock Market Forum

Gold Mining Stocks

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There's obviously a disconnect between POG and the major gold miners. I understand costs / inflation has been an issue for companies holding their AISCs and development capexs in check but it just looks off on the surface of it. The sector has just been well out of favour with strategic allocation of capital going to other sectors like the FANGS. As mentioned elsewhere, gold related allocation has been historically 2% of the market but recently it's been around .25%. Allocation should shift to mean unless this an historical trend change.

The NEM chart is a classic example of what's going on. It should be running at ATHs on the surface of it. Higher gold prices just don't seem to be factored in at all.

Screenshot 2024-03-05 at 11.52.26 am.png
 
@Sean K how do you feel about gold stocks? Isn't that the answer? I'm not at all excited by the high in the gold price because I'm assuming wages, management take, inflation and endless growth/sustaining capital allocation will eat it all up. Then the operational setbacks and disasters. No divs to speak of. That's for the long term holders and the newbies aren't seeing anything like the buzz generated in crypto (no costs), uranium, battery metals, blah blah. Frankly I can't wait to monetise my goldies and put the proceeds into dividend paying industrials.
 
finicky said:
@Sean K how do you feel about gold stocks? Isn't that the answer? I'm not at all excited by the high in the gold price because I'm assuming wages, management take, inflation and endless growth/sustaining capital allocation will eat it all up. Then the operational setbacks and disasters. No divs to speak of. That's for the long term holders and the newbies aren't seeing anything like the buzz generated in crypto (no costs), uranium, battery metals, blah blah. Frankly I can't wait to monetise my goldies and put the proceeds into dividend paying industrials.
Click to expand...

The price of the equities v the spot price does not add up to me. Either gold is coming back down or the stocks will have to go up. I'm being a bit contrarian with the stocks I suppose. A general market correction will get in the way of my theory.
 
Sean K said:
The price of the equities v the spot price does not add up to me. Either gold is coming back down or the stocks will have to go up. I'm being a bit contrarian with the stocks I suppose. A general market correction will get in the way of my theory.
Click to expand...
I know next to nothing about any of the individual gold stocks, But they should be treated no different to any other mining company.

So, what you need to be looking at is not the gold price in isolation, but things like

1. How much profit margin will the company make on each ounce they sell

2. How many ounces they sell each year

3. How many years of reserves to they have left in the ground, to keep the operation running.

4. How many other projects they have in the wings to work on when the operating projects scrape bottom, and then the likely economics of those new projects.


It doesn't really matter what commodity you look at, they all rely on the above metrics when it comes to their miners, ideally you want to invest in the lowest cost producers, check out what happens to the high cost producers of nickel at the moment for example.
 
Value Collector said:
I know next to nothing about any of the individual gold stocks, But they should be treated no different to any other mining company.

So, what you need to be looking at is not the gold price in isolation, but things like

1. How much profit margin will the company make on each ounce they sell

2. How many ounces they sell each year

3. How many years of reserves to they have left in the ground, to keep the operation running.

4. How many other projects they have in the wings to work on when the operating projects scrape bottom, and then the likely economics of those new projects.


It doesn't really matter what commodity you look at, they all rely on the above metrics when it comes to their miners, ideally you want to invest in the lowest cost producers, check out what happens to the high cost producers of nickel at the moment for example.
Click to expand...

Thanks for the advice VC.

But, I'm talking more about the general gold equities market which should say something about value. The GDX and GDXJ are way off highs and have gone in the opposite direction to gold of late. I've been putting these charts up in the gold thread for a while. There's something more than fundamentals affecting the general gold equities market. My thoughts are that it's not fundamentals, but sentiment. Sentiment will change. Maybe once the Uber drivers start telling us to buy gold. But, by then, most will have missed the boat.
 
Sean K said:
Thanks for the advice VC.

But, I'm talking more about the general gold equities market which should say something about value. The GDX and GDXJ are way off highs and have gone in the opposite direction to gold of late. I've been putting these charts up in the gold thread for a while. There's something more than fundamentals affecting the general gold equities market. My thoughts are that it's not fundamentals, but sentiment. Sentiment will change. Maybe once the Uber drivers start telling us to buy gold. But, by then, most will have missed the boat.
Click to expand...
there are hints around that the Chinese ( and maybe some other nationalities as well ) are letting bonds and notes ( and not just US offerings ) mature and rolling the proceeds into physical , i assume delivered to a storage facility that is convenient

there are also rumors of Central Banks doing similar

but of course rumors and hints aren't facts ( but may or may not be accurate anyway )

but given at least one story of huge manipulation in the silver market , what is possible currently

the US ( and several other G7 nations ) is huge , bond yields are all over the place ... so where is ' safe ' to store your wealth ?

but if your Uber driver is telling you to buy gold .... do you sell or just stop buying more ?
 
divs4ever said:
there are hints around that the Chinese ( and maybe some other nationalities as well ) are letting bonds and notes ( and not just US offerings ) mature and rolling the proceeds into physical , i assume delivered to a storage facility that is convenient

there are also rumors of Central Banks doing similar

but of course rumors and hints aren't facts ( but may or may not be accurate anyway )

but given at least one story of huge manipulation in the silver market , what is possible currently

the US ( and several other G7 nations ) is huge , bond yields are all over the place ... so where is ' safe ' to store your wealth ?

but if your Uber driver is telling you to buy gold .... do you sell or just stop buying more ?
Click to expand...

Maybe not a rumour.

Screenshot 2024-03-06 at 9.05.32 am.png
 
Sean K said:
Thanks for the advice VC.

But, I'm talking more about the general gold equities market which should say something about value. The GDX and GDXJ are way off highs and have gone in the opposite direction to gold of late. I've been putting these charts up in the gold thread for a while. There's something more than fundamentals affecting the general gold equities market. My thoughts are that it's not fundamentals, but sentiment. Sentiment will change. Maybe once the Uber drivers start telling us to buy gold. But, by then, most will have missed the boat.
Click to expand...
Maybe it’s just all the Gold Bugs have been distracted by Bitcoin.
 
Northstar's view which he espoused 18 months ago. Immediately ahead - excitement for gold, after which the disappointment of a retrace, then the big bullish move starts in 2025. Better bestir myself into a bit of gold stocks trading later if I'm to take him seriously - sell a few NST and remaining explorer specs perhaps.
Maybe the retrace will coincide with the general crash in 2024 that Felix Zulauf has predicted?

Screenshot_20240306-193420_Chrome.jpg
 
I agree the "hot" money or short term gold speculators have moved to bitcoin. They did this years ago. The few gold speculators that are left are now trading against the banks. It seems the banks are selling more than they hold distorting the market for their own benefit. It's disappointing that they're not held to account.

The banks are keeping the POG low and within a comfortable (lucrative for them) trading range. Inflation and the artificially capped gold price has reduced the miners margin and they've sold down. Investors had to as the miner margins fall.

Gold isn't nickel. If the POG goes below production costs, which is extremely unlikely, some high cost producers will stop producing. This will force POG higher even against the banks. The banks will operate at a higher trading range to kept the production constant and controllable.

Low cost gold producers will survive and boom if the POG gets out of the banks control for even a little while.
 
This is a gold mining company in India. It is the only Gold Miner quoted in India so it's easy to find. Unfortunately, most Brokers do not allow purchases on Indian Exchanges unless you live in India of course. So a good reason to post it here:cool:
deccangoldmines.com

Current Projects - Deccan Gold Mines Ltd. (DGML)

Deccan Gold Mines Ltd. (DGML), is the first and the only gold exploration company listed on the Bombay Stock Exchange Limited (BSE) which was established in the year 2003 by promoters with deep roots in the exploration and mining sector.
deccangoldmines.com deccangoldmines.com

Current Projects​


 
We've been discussing the disconnect between POG and the GDX / GDXJ which has been put down to costs of production, focus on crypto and sentiment. This is three months old but very relevant today. Always love hearing Lassonde's opinion.

 

March 28, 2024 - B2Gold Corporation AMEX:BTG TSX:BTO NSX:B2G
B2Gold is a low-cost international senior gold producer headquartered in Vancouver, Canada. Founded in 2007, today, B2Gold has operating gold mines in Mali, Namibia, and the Philippines, a mine under construction in northern Canada and numerous development and exploration projects in various countries including Mali, Colombia and Finland.​
 

• Feb 20, 2024 - NYSE DRD JSE DRD
Considering that environmental, social, and governance (ESG) aspects have become increasingly important over the years, especially in the mining industry, gold producer DRD GOLD emphasises that its tailings retreatment business model was built to realise ESG compliance.
 

Would you have spotted this share is an absolute no-goer? It reminded me as to how easy it is to be slack on research.
 

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