The gold mining stocks we’ve listed have the potential to upgrade into the VanEck Vectors Gold Miners ETF (GDX), as a result of the acquisition of Goldcorp by Newmont Mining Corp. (NYSE:NEM)
SmallCapPower | January 21, 2019: On January 14, 2019, Newmont Mining Corp. (NYSE:NEM) announced its US$10 billion agreement to acquire Canadian miner Goldcorp Inc. (TSX:G). This means that the GDX is likely to selloff its holding in Newmont Mining and will either buy additional weight in other companies within the ETF or purchase a high-weighted stock in the GDXJ. We believe the likelihood in purchasing from the GDXJ is higher, which could mean an upgrade for the gold mining stocks on our list today.
Both the GDX and GDXJ are rebalanced quarterly, and generally the announcement for all changes occurs in early March.
*Share prices as at close January 17, 2019, data obtained from S&P Capital IQ.
Kinross Gold Corporation (TSX:K) – $4.18
Kinross Gold is a Canada-based gold mining company with mines and projects in the U.S., Brazil, Russia, Mauritania, Chile, and Ghana. The Company’s operational mines include: Fort Knox, an open-pit gold mine located in Alaska; Round Mountain and Bald Mountain, open-pit mines both located in Nevada; The Kettle River-Buckhorn mine located in Washington State; Paracatu, a gold mine located in Brazil; Maricunga, an open-pit mine located in Chile; The Tasiast mine located in Mauritania; and the Chirano mine located in Ghana. On January 17, Vanguard Group acquired an additional 1.4M shares in Kinross Gold, increasing its stake in the Company by 4.3%. On the same day, Bank of New York Mellon Corp increased its holdings in Kinross Gold by 13.8% shares, increasing their total ownership to ~15.1 million shares.
- 7-Day Total Return: -0.2%
- 30-Day Total Return: 0.9%
- Market Cap: $5,226.0 Million
- GDXJ Holding Percentage: ~6.0%
Yamana Gold Inc. (TSX:YRI) – $5.65
Yamana Gold is a Canada-based gold producer focused throughout North and South America. With locations in Canada, Brazil, Chile, and Argentina, Yamana focuses on selling precious metals, such as gold, silver, and copper. On January 18, the National Bank Financial issued FY 2020 earnings estimates, anticipating that the basic materials company will earn $0.06 per share, giving the stock a “Buy” rating.
- 7-Day Total Return: +0.9%
- 30-Day Total Return: +1.6%
- Market Cap: $3,075.9 Million
- GDXJ Holding Percentage: ~3.6%
B2Gold Corp. (TSX:BTO) – $3.70
B2Gold engages in development and exploration of mineral properties in Burkina Faso, Colombia, Finland, Mali, Namibia, Nicaragua, and the Philippines. B2Gold Corp. also holds an 80% interest in the Fekola mine, located in Mali, a 90% interest in Otijkoto gold mine in Namibia, a 100% interest in La Libertad mine located in Nicaragua, and more. On January 17, the Company announced that it had record-setting 2018 production, boosting its output by 51% YoY. During the year, ~953K ounces of gold were produced from the new Fekola mine in Mali. The Company’s Masbate mine in the Philippines also set a record for production in 2018.
- 7-Day Total Return: -2.6%
- 30-Day Total Return: -1.3%
- Market Cap: $3,664.3 Million
- GDXJ Holding Percentage: ~3.0%
Pan American Silver Corp. (TSX:PAAS) – $19.21
Pan American Silver engages in the exploration, extraction, processing, and refining of silver from mines. The Canada-based Company operates and owns silver mines located in Argentina, Bolivia, Mexico, and Peru. Pan American Silver produces and sells gold, lead, copper, and zinc. It also holds interests in the Dolores, Huaron, Morococha, San Vincente mines, and more. Dimensional Fund Advisors LP recently increased their total holdings in Pan American Silver by 188,475 shares in addition to its 941,742 shares already held.
- 7-Day Total Return: -3.7%
- 30-Day Total Return: -2.5%
- Market Cap: $2,945.3 Million
- GDXJ Holding Percentage: ~3.2%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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