(Kitco News) - Mining companies' 2024 financial results are showing promise, with some seeing record margins, according to Nicole Adshead-Bell, Director at Cupel Advisory.
"When you start seeing true margin expansion, and we're in that environment where the gold price is moving more rapidly than the inflationary pressures, so that's the tickling of interest that occurs that starts to get, and that's the marginal investors that we need," Adshead-Bell told Kitco Mining.
Shareholder returns increase
Many companies are increasing returns to shareholders through dividends and share buybacks, Adshead-Bell noted.
Mergers and acquisitions (M&A) are expected to continue in the gold and copper sectors. "At some point in time, investors want to see growth, and the easiest way for a company to grow is not through exploration," said Adshead-Bell, "it's through acquiring companies and or assets."
Adshead-Bell believes copper developers are currently undervalued. She notes that copper developers are trading at an average P/NAV of 0.35, indicating that "the market is saying we're not giving you the inherent value that your asset base represents."
Barrick Gold considers redomiciling?
Barrick Gold may redomicile from Canada to the United States. This is potentially due to concerns about working with Chinese companies.
Adshead-Bell called Canada's stance "crazy" and "an incredible overreach of the government." She also stated that Chinese entities have been a material source of capital for the sector.
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