What’s up guys Ben Here and Welcome to Motivation 2 invest.
With central banks from around the world printing trillions of dollars in stimulus packages, and government debt sky high.
Many fear hyperflation and thus the devaluing of paper fiat currency
Billionaire Ray Dalio, the worlds largest hedge fund manager even wen’t as far as saying “cash is trash”
During uncertain economic times investors retreat to precious Metals such as Gold & Silver.
Gold also performs better in low interest environments as it doesn’t yield any interest.
When interest rates are high, people can get nice returns from bonds or even in their savings account.
So with this bubbling catalyst going on right now, Gold has reached all TIME highs smashing through $2000/ounce.
https://news.sky.com/story/gold-strikes-record-high-after-topping-2-000-for-first-time-12042772
Bank of America & many large institutes upgrading their price target to $3000 per ounce.
So during this gold boom, could gold & silver mines be about to sky rocket also!?
Well in this video we’re going to find out!
As I deep dive in my top 5 Gold Mining stocks!
Be sure to watch till the end to find out whether I have shares in any of these.
Without further adieu, lets dive in.
INTRO*
How to Value a Gold Mining Company?
Valuing a mining company is similar to valuing many other commodity mining companies such as Oil.
The price is governed by three main factors, SUPPLY, DEMAND and COST
With Demand governed by many factors such as Economic Conditions, Political uncertainties and government policy. That is the part the business can’t control directly.
How ever, what it can control is the COST OF MINING.
Thus
The most important metric called AISC All in sustained costs.
How much does it cost the company from start to finish to refine the gold and sell it on the market.
For example, if a gold mining companies cost is $1000
Then at todays current gold price they are making around $1000 per ounce in profit.
So with that being said, lets hop into my top 5 list.
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New Mount Gold Corp:
Worlds Largest Gold producer over $55 billion market cap. 1.45% dividend.
This is one of the best dividends you will get in the Gold Industry.
(Globally Diversified company, worlds number 1 gold producer.
(If the Gold price continues to sky rocket it would be right to assume you that they will also raise there dividend.
I was invested into this company a few years back and made some healthy profits.
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Barrick Gold.
The worlds 2nd largest gold producer, $51 billion market cap.
Over 1% dividend. Decent AISC. Anything under $1000 is great in this market.
Globally Diversified Mining Giant.
Investor presentation.
(Share price)
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Wheaton Precious Metals:
This is a streamer they don’t actually own any mines. They have an agreement with the mine they just buy the commodity and sell it on the open market.
Market Cap, 1.07% dividend yield, share price.
Global Diversity mines in north and south America. This is my top pick for diversity and the fact they use an alternative business model to many of the others.
https://www.wheatonpm.com/Home/
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BLUESTONE RESOURCES:
Bluestone resources, is a small cap stock.
What I love about this stock is it has such a low AISC and around 8 year mine life.
Low AISC = $579/ounce.
Analysts are very bullish on this stock. Average price target over $3.
The smaller cap stocks are more risky as they only have one project in the country.
For example, If the country runs into political uncertainty this could affect the stock.
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Kin ross Gold Corp.
I love this company, it’s a large cap currently trading at a 5 year high.
(Show stock chart peaks from financial crisis in 2008, back in the 90’s it traded at over $40.
This is a while diversified across Russia, west Africa, America.s
There cost is around $1000
Final Thoughts?
Overall, Investing into gold mining stocks is a great way to be exposed to the gold industry especially during this time when many are retreating way from paper fiat currency.
Which mining stock is right for you depends upon your risk tolerance the globally Diversified giants offer much safer investments as if a mine gets shut down you won’t lose halve your investment. Thus I prefer this diversified companies.
However, if you wish to aim for incredible returns than investing into one of the smaller cap companies with just a single mining area could be an option for the adventurous part of your portfolio which you don’t mind losing.
However, the smaller caps require a lot more research & due diligence.
With that being said, this is not financial advice, so please research yourself in more detail before investing.
