Gold miners present deep value post-correction
The guest argued that gold and silver mining stocks, particularly royalty companies, are highly attractive following a 35% to 40% correction from their highs.
The argument
The guest explained that the spread between the price of gold and the miners' extraction costs remains very wide, which will drive high free cash flow yields over the next two to three years. He believes the shakeout of short-term momentum players has set the sector up for a strong move.
The thesis, stress-tested
✓ What validates it
- ✓Agnico Eagle Mines and other miners demonstrating expanding free cash flow margins in upcoming quarterly reports
- ✓Gold and silver prices resuming an upward trajectory into next year
▸ Risks discussed
- ▸Rising operational and extraction costs could narrow profit margins if gold prices stall
- ▸Persistent momentum-chasing behavior can cause short-term price volatility
Hear it yourself
"I mean, if you look at price to cash flow on the gold miners here, particularly the good ones, and also the royalty companies, we own three or four of the royalty companies in gold as well."
00:00 / 00:17
AFFILIATE LINK · ZORTIX MAY EARN A COMMISSION · NEVER A RECOMMENDATION TO TRADE