It has been a dynamic year for the Canadian gold mining sector and especially for junior gold miners. As the price for gold has started to rally due to a number of factors in the global economy and financial markets, gold mining stocks are coming out as some of the best performers. In the past months, more investors have been rushing to store their capital in safe-haven assets, while trying to beat the rush of other traders.
This week, Canada's main stock index edged up on Thursday as the months-long U.S.-china tariff war maybe drawing to a prolonged end ahead of U.S. President Donald Trump's speech.
At 09:42 a.m. ET (14:42 GMT), the Toronto Stock Exchange's S&P/TSX composite index was up 6.18 points, or 0.07%, at 16,963.78. Seven of the index's 11 major sectors were higher, led by the materials sector. Precious and base metals miners were marginally lower as Gold Futures for December delivery were up 0.69% or 10.05 to $1463.75 a troy ounce.
One of the biggest gainers was Eldorado Gold Corp (TSX:ELD). The gold miner was up 3.27% or 0.33 points to 10.43 in late trade. Junior miner Katanga Mining Ltd. was among the most heavily traded shares by volume.
As the yearend draws nearer, Newmont Goldcorp (TSX:NGT)(NYSE:NEM) has become a contender for top Canadian gold company following its takeover of Goldcorp earlier this year. This significantly increased its size and operating ability and has been showing in the investor confidence and rising interest in Newmont’s gold stock.
Newmont now has 14 operating mines and two joint ventures on four different continents with 90% of its reserves located in the Americas or Australia. The main focus of the company is stable production of six million to seven million ounces annually by optimizing its operations and driving down costs. Though its baseline is already strong, the company believes it can continue to improve.
Production in 2019 up until the end of the third quarter comes to roughly 6.3 million ounces of gold at average all-in sales costs of just $965 per ounce.
This performance compares to Canadian gold miner Barrick’s all-in sales cost of $984 on the 1.3 million ounces of gold produced in the third quarter. Barrick only expects to produce a total of 5.1-5.6 million ounces of gold this year, less than Newmont has done up until this point.
With the fall in gold’s price last week, it has created a great buying opportunity for junior gold miners and gold stocks in general. However, given that none of the problems in the global economy have been truly solved, investors would be wise to take advantage of this window of opportunity while it is still open.