Buying Stocks in Gold Mining Companies - dummies

Buying Stocks in Gold Mining Companies

One way to get exposure to gold is by investing in gold mining companies. A number of companies specialize in mining, processing, and distributing this precious metal. Here are a few of them:

  • Newmont Mining Corporation (NYSE: NEM): Newmont, which is headquartered in Colorado, is one of the largest gold mining companies in the world. It has operations in Australia, Indonesia, Uzbekistan, the United States (Nevada and California), Canada, Peru, and Bolivia. It is actually the largest gold producer in South America.

    Additionally, Newmont has exploration programs in Ghana that could turn out to be very promising for the company. If you’re looking for a truly global and diversified gold producer with real growth potential, then you can’t go wrong with Newmont.

  • Barrick Gold Corporation (NYSE: ABX): Barrick is a Canadian company with headquarters in Toronto. It is a premier player in the gold mining industry and has operations in Canada, the United States, Argentina, Peru, Chile, Tanzania, South Africa, Australia, and Papua New Guinea.

    Barrick also has a foothold in the potentially lucrative Central Asian market, where it has joint operations in Turkey, Russia, and Mongolia. It also has one of the lowest production costs per ounce of gold in the industry.

  • AngloGold Ashanti Ltd. (NYSE: AU): AngloGold, which is listed in five different stock exchanges around the world, is a truly global gold company. Based in South Africa, it operates over 20 mines and has significant operations in Africa and South America, particularly in South Africa, Namibia, Tanzania, Ghana, Mali, Brazil, Argentina, and Peru, which all have major gold deposits.

    AngloGold has additional operations in Australia and North America. It is a wholly owned subsidiary of Anglo-American, the global mining giant.

Keep in mind that the performance of these companies is not directly proportional to the spot or future price of gold. These companies don’t give you the direct exposure to gold that gold certificates or bars do, for example. Also, by investing in these stocks you’re exposing yourself to regulatory, managerial, and operational factors.