With mining shares, investors can indirectly profit from the development of the gold price. Before investing, a detailed analysis of the prospective gold mine and the selected mining company is essential.
The world’s largest companies are of particular interest here. They promise the best price performance and offer the chance of dividend payments. A brief company profile on the two largest gold producers should make the selection easier. But sometimes it can also be useful to take a look at the smaller competition.
With a market capitalization of around 42.5 billion euros, Newmont Mining Corporation ranked as the world’s first largest gold producer in March 2021. However, the mining group is steadily engaged in a fierce battle with its main competitor for the industry leadership, Barrick Gold.
The US company is headquartered in Denver. In addition to gold, Newmont Mining also mines copper, silver and zinc on a smaller scale.
Newmont Mining Corporation operates mines in the USA, Australia, Indonesia, Peru and Ghana. The company’s smaller silver mines are spread around the globe.
In Australia, Newmont Mining is the leading mining company and holds full or partial stakes in the most important gold mines there.
Barrick Gold was the second largest gold company in the world as of March 2021, with a market capitalization of $30.6 billion. The Group’s current annual production is around 200 tons of gold. This corresponds to around 7 million ounces of gold. In addition to gold, the company also mines copper and silver and is also involved in the oil and gas business through its cooperation with Barrick Energy.
Barrick Gold is headquartered in Toronto, Canada. The company was founded back in 1978. Barrick Gold has been listed on the stock exchange since 1983.
The company operates gold mines mainly in the USA, Canada, Argentina, Chile and Peru, but also in Tanzania, Mali, the Democratic Republic of Congo, the Dominican Republic, Papua New Guinea and Australia. Barrick Gold resells most of the raw materials it extracts and does not process them itself.
The small competition
Besides the giants in the gold industry, the small competition can be interesting for investors. The big players in the gold industry are also struggling to keep the often gigantic investment costs for their large-scale projects in check. Investors should therefore keep a close eye on the costs of mining companies and also watch for signs of whether major projects may be delayed.
The smaller ones usually have an easier time of it, because they also have to pay much lower costs for their much smaller mines.
For investors, it is often worthwhile to look away from the industry giants to the small gold producers, because their projects can often convince with a good profitability.