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:
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