Divergence in the Aussie gold producers

Over the past year, the stock prices of Australian gold mining producers have diverged from gold as priced in AUD.

The chart below shows ASX listed Northern Star (NST) laid over the AUD gold price.

(NST appears in blue)

Whilst a company’s gold reserves and resource along with their ‘all-in sustaining costs’ (AISC) are a couple metrics to include in your analysis, keep in mind that Gold isn’t perishable, nor does it replenish such as wheat.

Furthermore, a gold miner can also choose to ‘leave the gold in the ground’, rather than incur rising costs of extraction.

And, on a U.S. Dollar basis, these companies are even cheaper, the further the Australian Dollar declines.

July 12, 2022

by Rob Zdravevski


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