Mentioned on Tuesday in the post The gold price and PM miner divergence, the subject has been on my mind all week so here’s another chart, showing a slightly longer timeframe that takes in pre/post Ukraine invasion:
The main issue is the fading volume, that needs to improve at some point. Then the tendency for concentration in the biggest Tier 1 names (NEM and GOLD now out-performing) doesn’t help, but there’s no denying how the miners have been strong in our warlike days. Gold bullion has done well enough by holding handily above the U$1,900/oz line (though goldbugs will shake their fists at the unfairness of it all after any $10 re-trace…it’s so unfair) but for once, the miners are leading the metal.
That nice Mr. Market seems to have finally realized even the mediocrity running most PM miners can’t help but return free cash flow at these market prices, so any company with a reasonable amount of financial nous is money-printing in 2022 and will deliver real profits to real bottom lines, just like companies in the serious business world. And yes, knock them for other things but the serious boards start with NEM and GOLD, both saw their credit ratings upgraded last month for good reason. Among smaller companies Wesdome (WDO.to) comes to mind but frankly, after that ideas for candidates peter out quickly and it shouldn’t be that way. FNV and WPM for sure, but they aren’t miners per se. AGI, maybe. Any suggestions? Please don’t say AEM, SAND or KGC.