Gold stocks went on a bigger roller coaster than gold in 2022. Cost increases combined with lower gold prices caused some companies to miss earnings. The industry guided to cost increases in the five percent range early in the year, however, higher commodities prices brought on by the Ukraine war forced many companies to revise costs higher.
It looks like 2022 costs will average around $1,200 per ounce, up about 10% over 2021. While a couple of companies plan on trimming dividends, most dividends remain intact and stock buybacks have continued along with healthy margins. The recent positive gold price trend along with early indications that costs should remain around current levels bodes well for gold miners in 2023.
MVIS® Global Junior Gold Miners Index
Source: MarketVector IndexesTM. All values are rebased to 1,000. Data as of January 9, 2023.
About the Author:
Joe Foster has been Portfolio Manager for the VanEck International Investors Gold Fund since 1998 and the VanEck – Global Gold UCITS Fund since 2012. Mr. Foster, an acknowledged authority on gold, has over 10 years of dedicated experience in geology and mining including as a gold geologist in Nevada. He has appeared in The Wall Street Journal, Financial Times, Barron's, and on Reuters, CNBC and Bloomberg TV. Mr. Foster has also published articles in a number of mining journals, including Mining Engineering and Geological Society of Nevada.
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