First of all some graphs
Gold weekly price log long term (1938 – today)
Silver weekly price log (Long term)
Gold/silver ratio (long term)
Barron’s gold mining index (weekly)
And the last one very important Barron’s index / gold price long term
The last chart is showing that mines are really cheap compared to the evolution of the gold price.
Beginning of July I already wrote an article about the huge low valuation of mining stocks : Mining companies are still cheap despite last run
It is very difficult to say how cheap they are now. Increase (or decrease) of AISC and decrease of reserves have to be taken in account.
In a very interesting joint document, we can look at the following tables showing that AISC are decreasing from the top of 2011 (where the company were also spending a lot of money in exploration and super crazy CEO salaries !)
but it looks like increasing again
It’s probably because the reserves are going down and it costs more to find gold (deeper drilling and extraction costs higher)
In addition, it is more and more difficult to discover
But there is a very good news : The gold price is going up up up which bring more and more value to all the gold projects (exploration, developers and producers)
It is why it is still cheaper for companies to acquire than drill and develop their project (google translated from French).
A big number of M&A are on the way. Producers are cash rich.
And last not least, the gold market size is small compared to the rest and gold do not represent a huge weight in the portfolios.
I would not say “buy gold mines closed eyes” but it is not far !
I am watching a cheap gold stock with a huge potential. If you want to know more about it you can contact me here (it is free !) : Contact
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All my english articles here : https://www.crottaz-finance.ch/blog/category/english/