(Kitco News) - Tracking a miner's costs are just as important for anticipating stock jumps as keeping an eye on metal prices, said Neil Adshead, consultant analyst at Commodity Discovery Fund.
This week Adshead recorded Digging Deep with Kitco correspondent Paul Harris.
The gold market remains bullish after a strong start to 2024. Copper is in a different position despite the predicted deficit. There's been less interest from the mining majors in exploration and development. Copper projects are challenged by high costs and more technically challenged projects.
"When you look at the global pipeline of copper resources, there is a fair amount of undeveloped copper out there. It's just the high hanging fruit—if that's the phrase you can use—is more difficult to bring into production," said Adshead.
Kinross Gold reported significant margin expansion in its Q1, demonstrating the cyclical nature of a miner's costs and profits. Understanding these cycles can help investors predict potential share price movements, noted Adshead. Companies with higher costs often have greater leverage as the price of the underlying commodity rises.
