Is Timmins Gold a Worthy Investment?
Thus far, 2014 has been an excellent year for gold mining shares. The Market Vectors Gold Miner ETF is up nearly 6 percent whereas the Dow Jones Industrial Average is down 0.5 percent. As I expressed elsewhere, I believe there is excellent value in gold and that gold mining shares are excellent investment vehicles to leverage one’s exposure to gold.
However, not all miners are created equal. Many of them operate in risky countries such as South Africa or Argentina. Others have high debt loads to service, or high production costs. Finally, some simply aren’t growing. Investors in several gold mining companies would have done extremely poorly had they purchased shares in many of the companies that face these headwinds. Consequently, investors in gold mining shares need to be stock pickers.
Recently, I suggested that investors consider purchasing shares of Goldcorp (NYSE:GG), which is a company with solid growth, generally low production costs at its mines, a solid balance sheet, and very little exposure to political risk. All of these points combine to make Goldcorp a solid investment.