With gold prices breaking through $1000/ounce (Sept. 2009), US dollar weakness and continued upside pressure on gold with the recent announcement by Barrick of the removal of its gold hedging books (a very bullish and self-assured call on gold), you might like to take a fresh look at some Canadian gold stocks. For some analysts, Canada is the most politically safe region for gold miners and of course, is home to two of the world’s largest gold mining companies.
Here are the largest Canadian gold companies listed according to market capitalization.
Top 5 Most-Traded and Largest Canadian Gold Producers All Pay Dividends
.
Barrick Gold Corp. (TSX: ABX) – One of Canada’s top multinational companies, Barrick has been trading at a discount to its peers lately, but today’s move may change all of that. Barrick CEO Aaron Regent (as of January 2009) might be putting his signature on the company by removing its infamous hedging books. This will give Barrick more of a “full-exposure” to gold and looks to have increased some analysts’ interest in the company. Barrick has also issued what amounts to the largest equity issue ever in Canadian history, at $4 billion worth of shares, which will increase the share count by 11%. Barrick has also announced they will be buying another 3 millions ounces of gold in the near future. Some analysts still have reservations about Barrick, however. There is talk of their production slowing off, and the question for many now is how the CEO will deal with growing this company, which has already hit many of its own ceilings. Market Cap of $37.1 billion. Dividend Yield: 1.00%
GoldCorp Inc. (TSX: G) - Goldcorp is known for its great growth profile, and is considered to have much more room to grow than Barrick. Expectations are of over 50% growth by 2013. 50% of its portfolio comes from the largest mine in Mexico, and another 20% from its Red Lake region in Ontario (Canada). They also have operations in Guatemala and Honduras. Some analysts are continually concerned about the valuation of the company, expressing the concern that it has been overvalued over the past 5 years. Relatively new CEO Charles Jeannes defends the valuation, however, in light of its low-cost operating structure. Market Cap of $32.4 billion. Dividend Yield: 0.4%
Kinross (TSX: K) – Kinross is Canada’s third largest gold producer, running a portfolio of mines in Russia, Brazil, Chile, America and more. CEO Tye Burt is pleased with 2009 results over 2008; cashflow, revenue are significantly up and cash-costs are significantly down. Burt doesn’t think earnings are the best measure of a gold company, but rather cashflow (a similar sentiment to what Yamana’s CEO believes, too). Market Cap of $16.4 billion. Dividend Yield: 0.5%
Agnico-Eagle Mines Ltd. (TSX: AEM) – A lot of analysts like Agnico because of its low-cost structure and diversification. AEM is also considered to be a very well-managed company. CFO David Garofalo thinks there’s no reason to think we won’t see real all-time highs in gold quite soon. Unlike Barrick, Agnico has never hedged against gold. Agnico focuses on low-cost gold markets, which helps keep its costs down and give it a “natural” hedge. Risks? The Canadian dollar is its biggest currency risk, since it reports in US dollars. Interestingly, Agnico-Eagle also has a DRIP plan. Market Cap of $11.1 billion. Dividend Yield: 0.3%
Yamana Gold Inc. (TSX: YRI) – Yamana focuses on cashflow generation, and the cash position of the company is more important than earnings for the CEO, Peter Marrone, who holds a significant personal position in the company. Marrone also thinks the stock is trading at a discount to the peer group recently. Risk? Yamana is particularly affected by the impact of the strength of the Brazilian real, but mitigates it by keeping high cash reserves in the currency local to where they are doing business. Costs in industry have gone up, though, Marrone says. Market Cap of $8.3 billion. Dividend Yield: 0.4%
Top 15 Junior Canadian Gold Stocks
Here’s a quick list of some smaller gold companies, but still the next largest in the line-up and represent no small chump change, either. Especially note the three of these that do offer a dividend: IAMGOLD, Franco-Nevada, and Royal Gold.
Lihir Gold (TSX: LGG) Market Cap of $6.6 billion **Does not pay a dividend**
IAMGOLD Corp (TSX: IMG) Market Cap of $5.3 billion. Dividend Yield: 0.4% This is another stock with fairly good trading volumes on the TSX.
Eldorado Gold Corporation (TSX: ELD) Market Cap of $4.5 billion. Eldorado is another favorite with many. **Does not pay a dividend**
Franco-Nevada Corporation (TSX: FNV) Market Cap of $3.4 billion – Dividend Yield of 0.9%
Red Back Mining Inc. (TSX: RBI) Market Cap of $2.9 billion **Does not pay a dividend**
Royal Gold, Inc. (TSX: RGL) Market Cap of $2.0 billion Dividend Yield: 0.7%
Osisko Mining Corporation (TSX: OSK) Market Cap of $2.0 billion. **Does not pay a dividend** One of best-performing gold stocks last year. GoldCorp bought a 10% stake recently in the company.
Centerra Gold Inc. (TSX: CG) Market Cap of $1.8 billion **Does not pay a dividend**
New Gold Inc. (TSX: NGD) Market Cap of $1.4 billion. Also good performance over the last year (2008-2009). Comparable to Osisko. **Does not pay a dividend**
Seabridge Gold Inc. (TSX: SEA) Market Cap of $1.2 billion**Does not pay a dividend**
Alamos Gold Inc. (TSX: AGI) Market Cap of $1.1 billion **Does not pay a dividend**
Gammon Gold Inc. (TSX: GAM) Market Cap of $1.1 billion **Does not pay a dividend**
Jaguar Mining Inc. (TSX: JAG) Market Cap of $928.1 million **Does not pay a dividend**
NovaGold Resources Inc. (TSX: NG) Market Cap of $910.7 million **Does not pay a dividend**
Golden Star Resources Inc. (TSX: GSC) Market Cap of $808.8 million **Does not pay a dividend**
What’s amazing is that this barely scratches the surface of publicly-traded gold miners in Canada. If you do further research you can find the even smaller players, some which are just in the early stages of exploration, many of which are penny stocks.
You might also be interested in these articles on resource investing in Canada:
Bullish on Nat Gas? Check Out These Canadian Natural Gas Stocks and ETFs
5 Largest, Most-Traded Uranium Stocks in Canada
Lithium Mining Companies in Canada
Top Junior Silver Mining Companies
If you find this article helpful, please share it on sites like Twitter, StumbleUpon or Reddit. I’d also love it if you grab my RSS feed for free updates and get investment info delivered right to your reader or by email! You can also follow me on Twitter.
Related Posts - Best Canadian Stocks and ETFs From the Past Decade 1999-2009
- Gold Dividends: 11 Mining Stocks That Pay Them
- Top 10 Canadian Dividend-Paying Multinationals
- MoneyEnergy's First Carnival Shout Out
- Top 10 Largest Global Gold Mining Stocks
Related Articles From Other Websites
{ 8 comments… read them below or add one }
Question for ya, Money…
What do you believe are the advantages to adding miners in addition to direct gold ownership? Obviously dividends are an attractive feature, but most of the dividends above are minimal or even nonexistent.
I do own a Canadian Fund; The Central Fund of Canada, which is split 50/50 in direct gold/silver bullion, but no mining companies. Wondering if it’s something I add…
-Blake
Hi Blake…good question. I do think it’s good diversification. Gold mining companies don’t always move in lockstep with bullion itself for a variety of reasons, some market oriented, some specific to the politics of where their mines are located. Thus yesterday we saw Barrick stock pullback even though bullion prices were still rising and at yearly highs. In the depression, it was made illegal after a while to own gold in the U.S., and gold stocks soared. Another advantage is that some miners are diversified into some other metals, too. But right now I think the market effect is the biggest advantage. It could allow you to take a wider range of benefits from gold going up, since sometimes bullion will be higher, faster, and sometimes the stocks can rise even higher than gold prices themselves (percentage wise). This is how I understand it at the moment, anyway.
Makes sense. I would expect a decent sized revolt if the government attempted to ban gold ownership, but with the way things are changing in the world, you never know!
Thanks Money!
I would have bought XGD.TO (Canadian gold producers ETF) ages ago if it weren’t for the obscene overweighting of the bankrupt criminal enterprise known as Barrick Gold.
Their “hedge” is really $9 Billion of shorted gold that they don’t have….and they’re trying to cover it with a $3 Billion public offering
I own Osisko and Centamin and I’m looking at a few others
@ARF – You know that Barrick has removed all their gold hedges, don’t you? This was the big news last week.
Are you sure Centamin Egypt is a Canadian company? I believe it’s Australian.
Thanks, you’re right. It’s listed on the TSE, but it’s been on the ASE since 1970.