Gold Stocks Outperforming Bullion as Companies Continue to Improve Margins
NEW YORK, NY -- (Marketwire) -- 11/01/12 -- After a solid start to the year, gold mining stocks have struggled of late. The Market Vectors Gold Miners ETF (GDX) is down more than 4 percent over the last month, while the Market Vectors Junior Gold Miners ETF (GDXJ) has crumbled more than 5 percent over the that period. Five Star Equities examines the outlook for companies in the Gold Industry and provides equity research on Brigus Gold Corp. (NYSE: BRD) and Golden Star Resources Ltd. (NYSE: GSS) (TSX: GSC).
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Since the end of June until now gold stocks have begun to outperform bullion. Over that time period the S&P/TSX Global Gold Index has gained 12 percent, while gold futures in New York have gained roughly 6.7 percent. Shares of major gold companies such as Goldcorp Inc. and Agnico-Eagle Mines Ltd. have surged recently as earnings have beat profit estimates as a result of lower costs and higher cash flow.
"The gold shares are starting to outperform the gold price," David Christensen, CEO of ASA Gold and Precious Metals Ltd. "As the companies begin to tighten their operating constraints and generate more cash flow; we're seeing some of that turnaround in the valuations in the industry."
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Brigus Gold is a high quality emerging mid-tier gold producer with projects in Ontario and Saskatchewan, with approximately 1.86 million ounces of gold in reserves. Brigus recently announced $10 million in flow-through financing which will fully fund an increased exploration program for 2013. The company is scheduled to release its third quarter 2012 results on November 13, 2012.
Golden Star is a mid-tier gold mining company over a quarter-century in age and total historical production of over two million ounces of gold. During the first 9 months of the year the Golden Star produced 246,248 ounces of gold, an increase of 7 percent from the year-ago period. The company is scheduled to release third quarter 2012 results after market on November 7, 2012.
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