ZT:
Based on their most recent quarterly reports, here's how the figures played out:
|
Company |
Cash Cost/Oz. |
Production |
Debt/ Equity |
Forward P/E |
|---|---|---|---|---|
|
AngloGold Ashanti (NYSE:AU ) |
$737 |
(1.6%) |
59.6% |
7.4 |
|
Barrick Gold (NYSE: ABX ) |
$592 |
(7.7%) |
50.2% |
7.3 |
|
Goldcorp (NYSE: GG ) |
$220 |
0% |
3.4% |
13.3 |
|
Newmont Mining (NYSE:NEM ) |
$693 |
(5.3%) |
37.1% |
11.3 |
|
Yamana Gold (NYSE: AUY ) |
$201 |
11.2% |
9.9% |
12.3 |
|
Kinross Gold (NYSE: KGC ) |
$677 |
3.7% |
20.4% |
8.7 |
|
Eldorado Gold (NYSE: EGO ) |
$493 |
(13.7%) |
1.6% |
18.6 |
|
Gold Fields (NYSE: GFI ) |
$916 |
(5.9%) |
34.9% |
7.3 |
|
Agnico-Eagle Mines (NYSE:AEM ) |
$556 |
(7.9%) |
24.0% |
21.9 |
|
New Gold (NYSEMKT: NGD ) |
$443 |
15.7% |
16.6% |
13.8 |
|
IAMGOLD (NYSE: IAG ) |
$710 |
(7.7%) |
16.9% |
8.8 |
|
AuRico Gold (NYSE: AUQ ) |
$504 |
11.9% |
12.8% |
15.9 |
As you can see here there are some clear standouts. Goldcorp and Yamana both benefited in a big way from byproducts which helped push cash costs near $200 per ounce. Goldcorp has been a leader in low-cost productionfor years, so this didn't surprise me much, but Yamana's $201 cash cost per ounce was an eye-opener.
Another interesting stat would be that only five of these 12 gold miners managed to boost production over the previous year (yes, I'm counting the 0.04% boost Goldcorp turned in).Big writedownsfrom Newmont Mining and Kinross Gold dragged down both EPS and the potential to boost production capability, while theclosing of the Goldex Mineat Agnico-Eagle in 2011 continues to hamper its results.
In terms of debt, we shouldn't be shocked to discover that AngloGold Ashanti and Gold Fields, two miners heavily invested in South Africa, boast some of the highest debt loads relative to equity. None of these miners has a particularly worrisome amount of leverage, but I feel standouts like Goldcorp's 3.4%, Eldorado's 1.6%, or even Yamana's 9.9% shine.
Now let's have a look at how these 12 miners ranked according to my TMFUltraLong Gold Miners Index:
|
Company |
Cash Cost/Oz. |
Production % |
Debt/Equity |
Forward P/E |
Cumulative Total |
|---|---|---|---|---|---|
|
AngloGold Ashanti |
11 |
6 |
12 |
3 |
32 |
|
Barrick Gold |
7 |
9 |
11 |
1 |
28 |
|
Goldcorp |
2 |
5 |
2 |
8 |
17 |
|
Newmont Mining |
9 |
7 |
10 |
6 |
32 |
|
Yamana Gold |
1 |
3 |
3 |
7 |
14 |
|
Kinross Gold |
8 |
4 |
7 |
4 |
23 |
|
Eldorado Gold |
4 |
12 |
1 |
11 |
28 |
|
Gold Fields |
12 |
8 |
9 |
1 |
30 |
|
Agnico-Eagle Mines |
6 |
11 |
8 |
12 |
37 |
|
New Gold |
3 |
1 |
5 |
9 |
18 |
|
IAMGOLD |
10 |
9 |
6 |
5 |
30 |
|
AuRico Gold |
5 |
2 |
4 |
10 |
21 |
To be honest, I wasn't shocked to find Agnico-Eagle pulling up the rear of the pack given its forward P/E of nearly 22 and its production struggles. What actually surprised me was just how poorly some of theSouth African minersfared with my valuation method. Many of these miners, like Gold Fields for example, will wow investors with very low Forward P/E ratios, but they cover up high cash mining costs and weak production prospects in the region.
Goldcorp was another expected top-performer with its byproducts leading to low mining costs and its low debt levels placing it toward the top of the pack. Even so, Goldcorp only performed well enough to be the second-best gold miner according to my valuation index.
Based on the inaugural TMFUltraLong Gold Miners Index, Yamana Gold is the best gold miner, statistically speaking. Yamana, as Christopher Barker laid out in February last year, hasincreased its organic reserves at a steady pacein recent years, and consistently yields some of the lowest mining costs in the industry. Furthermore, even after its run higher, Yamana's forward P/E of just 12.3 when coupled with its fairly consistent double-digit production growth seems to suggest even better times could be ahead.
Can Yamana remain the best?
My goal will now be to update the TMFUltraLong Gold Miners Index once a quarter and see if Yamana can maintain its top spot.
Goldcorp is one of the leading players in the gold mining market. For the last several years, investors have been the beneficiaries of several successful acquisitions and strong organic growth. Goldcorp's low-cost production of one of the most sought-after metals in the world continues to make it an attractive choice for long-term investors. Click here for our detailed report to discover more about this mining specialist.
