Highlights
- Gold is a preferred asset for many investors as it has a low correlation with the equity market, hence providing diversification benefits.
- Stock related to the gold mining industry generally gets impacted when gold prices in the international market show considerable movement.
Investment in gold is one of the popular strategies amongst investors. While physical gold has a low correlation with the equity market, it is considered an ideal asset class to buy as it provides diversification benefits.
However, investing in gold through stock related to the gold mining industry is in vogue, as their share prices are generally impacted whenever gold prices show considerable movement in the international market.
Consistent high prices of gold benefit the gold mining industries as companies can sell their inventory at a higher average realised prices which has a direct positive impact on the company’s revenue and profits.
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Let us look at FTSE listed 3 stock that operates in the gold mining industry:
Polymetal International Plc (LON: POLY)
The company is engaged in the mining of precious metals. It is one of the top gold and silver producers globally and has its mining assets located in Russia and Kazakhstan. During the three months ended 30 September 2021, its total gold production decreased by 8% at 437 Koz mainly due to the Covid-19 related restriction in Russia, which still has high coronavirus cases. Yet, the company has managed to generate USD 819 million in revenue during the period.
Polymetal International Plc’s current market cap stands at £6,483.3 million as of 28 October 2021.
Centamin Plc (LON: CEY)
The company operates in the exploration and production of gold at its Sukari Gold Mine project, one of the largest gold mines in Egypt. It reported revenue of USD 182.9 million, while its total gold production was at 103,546 ounces in the three months to 30 September 2021. The company has set a gold production target in the range of 400,000 to 430,000 oz and is on track to achieve the same.
Centamin Plc’s current market cap stands at £1,127.31 million as of 28 October 2021.
Pure Gold Mining Inc (LON: PUR)
The company has a gold mining project in Canada. As per the company’s estimate, the Red Lake-based mine is estimated to have a lifetime gold reserve of 9 g/t. During the third quarter, the company reported total production of 9,260 ounces, a rise of 54% compared to last quarter. The company is carrying out drilling and ramp development at its underground mine and anticipates a production rate of 600-700 tpd for the fourth quarter of 2021.
Pure Gold Mining Inc current market cap stands at £227.52 million as of 28 October 2021.
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