The New Gold Boom

Why the Yellow Metal Could Fly in 2021 - Seite 4

A set-up like this when Amex netted investors in the neighborhood of 1,000% would have multiplied that massive return even more. And now, Starr Peak is trying to position itself as a mini-Amex in more ways than one. So, this is hoping to be the big re-run, but the majors won't be left behind.

Big Gold Looks To Capitalize

In 2021, Warren Buffett surprisingly did a 180 on his long-held negative stance on gold when Berkshire Hathaway announced that it would be taking a massive stake in Canadian Barrick Gold (GOLD) at a time when gold was soaring. Berkshire Hathaway bought more than $560 million in Barrick Gold shares. Buffett often referred to gold as useless for the most part.  Buffett's investment in Barrick and change in tune on the gold front shouldn't come as much of a surprise, however.

Barrick Gold has had a particularly tough start to the year, seeing its share price fall from August highs of $29 to its current price of $20.18. That doesn't mean the company isn't still a good buy, however. Barrick Gold still has a healthy balance sheet, with debt down and enough cash on hand to remain well positioned and relatively risk-adverse.

Newmont (NEM) is the largest gold company on the planet, but that doesn't mean it doesn't still have upside potential. Founded in 1916, and based in Greenwood Village, Colorado, Newmont is a veteran miner with one of the top executive teams in the business, and its operations span 11 countries, including gold mines in Nevada, Colorado, Ontario, Quebec, Mexico, the Dominican Republic, Australia, Ghana, Argentina, Peru, and Suriname.

The big news for the company in 2019 was its acquisition of Goldcorp. Though it was controversial at the time, the $10 billion acquisition has paid off in a big way. As gold climbed to record highs thanks to investors piling into gold due to the COVID pandemic, Newmont has seen a boom in its share price. Last year, gold soared from $1282 to over $2000 at one point, and Newmont's stock rose with it, earning investors as much as 90% returns on their original purchase.

Yamana Gold (AUY) is another one of the world's top gold companies that has seen its share price hit especially hard this year. Yamana has fallen by as much as 25% since January alone, though it has recently started to regain some of its losses.

Earlier this year, Yamana signed an agreement with industry giants Glencore and Goldcorp to develop and operate another Argentinian project, the Agua Rica.  Initial analysis suggests the potential for a mine life in excess of 25 years at average annual production of approximately 236,000 tonnes (520 million pounds) of copper-equivalent metal, including the contributions of gold, molybdenum, and silver, for the first 10 years of operation. The agreement is a major step forward for the Agua Rica region, and all of the miners working on it.