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Gold-Mining Stocks Looked Much Better 5 Years Ago

By Alex Létourneau Kitco News
Wednesday October 15, 2014 10:15 AM

(Kitco News) - For investors who bought gold-mining stocks in 2009 and are still holding these positions today, we’re not trying to rub it in but you were better off five years ago.

Turning back time to December 2009, when Kitco News put out its first news story, we’re going to take a peek at what gold-mining stocks looked like roughly five years ago.

The NYSE Arca Gold BUGS Index (NYSE MKT:HUI), the Philadelphia Gold and Silver Index (NASDAQ:XAU), the Market Vectors Gold Miners ETF (NYSE MKT:GDX) and the Market Vectors Junior Gold Miners ETF (NYSE MKT:GDXJ) all reached their respective highs in late 2010 through late 2011, respectively.

During the first week of December 2009, the HUI traded at 443.66 and would eventually go on to peak at 628.34 during the first week of September 2011. As of Tuesday’s close, the HUI was trading at 194.68.

The XAU was at around 172.44 during the first week of December 2009 and went on to hit a high of 228.95 during the week of April 4, 2011, but as of Tuesday’s close, it has fallen to 79.27.

The GDX and GDXJ exchange-traded funds have also taken a beating during this five-year period.

During the first week of December, the GDX traded at $47.82 and went on to peak $65.80 during the first week of September 2009, but has now come down to $21.37, as of Tuesday’s close.

The GDXJ was at $102.12 during the first week of December 2009. It peaked at $171.84 during the last week of November 2010 and has now tumbled down to $33.05, as of Tuesday’s close.

The indexes and ETFs all hit a low point during the week of May 14, 2012 as gold prices continued to trend downwards from their all-time high of $1,921 in early September 2011. Prices bounced back but all of them ultimately fell to their most recent bottoms in December 2013.

Largest Gold Mining Companies By Market Cap 5 Years Ago And Now

The view at the top of gold-mining companies at the end of December 2009 is more or less the same, with the glaring difference being the smaller market cap they command today compared to five years ago.

According to data from William Matlack, investment banker with Scarsdale Equities LLC, five years ago, Barrick Gold Corp. (NYSE:ABX) led the way, followed by Goldcorp Inc. (NYSE:GG), Newmont Mining Corp. (NYSE:NEM), Australian-based Newcrest Mining Ltd. (ASX:NCM) and Kinross Gold Corp. (NYSE:KGC).

Looking at it today Goldcorp is on top, followed by Barrick, Newmont, Polyus Gold Intl. (LSE:PGIL) and Franco-Nevada Corp. (NYSE:FNV), a royalty and gold-streaming company.

Barrick had a market cap of $38.7 billion at the end of December 2009 with a stock price of $39.38. Today that has drastically fallen to a market cap of roughly $16 billion, with a stock price on the NYSE of $13.67, as of Tuesday’s close.

Goldcorp’s market cap of $28.8 billion, and stock price of $39.34, has come down from their positions at the end of 2009. While they are now the largest gold miner by market cap, the bar has been significantly lowered, with is market cap now standing at roughly $19.2 billion, with a NYSE stock price of $23.71, as of Tuesday’s close.

Newmont retained third position, but its market cap of $11.37 billion, with a stock price of $22.79 on the NYSE as of Tuesday’s close, is off its year-end figures of 2009 of a $22.7 billion market cap and stock price of $47.31.

Newcrest and Kinross saw steep losses to knock them out of the top-five. Newcrest remains in the mix with a market cap of roughly $6.9 billion and an ASX stock price of A$9.98, as of 8:57 EDT, but a far cry from its market cap $15.66 billion and stock price of A$36.00.

Kinross is now a mid-tier gold miner as the Tasiast mine and its abandoned Fruta del Norte project hurt stock prices over the years. The company now has a market cap of $3.41 billion, with an NYSE stock price of $2.95, as of Tuesday’s close, compared to a $12.8 billion market cap and stock price of $18.40.


By Alex Létourneau of Kitco News aletourneau@kitco.com
Follow Alex Letourneau @alex_letourneau




Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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