When it comes to assessing gold mining companies, it is very critical to look at their cost of production. Only the companies with decreasing production costs have a fighting chance to survive in the currently stressed gold market.
If a gold mining company isn’t able to reduce its costs, it’s setting itself up for troubles ahead. In case the precious metal prices decline, miners’ profitability will be severely hit.
Following the gold mining sector very closely, I have identified three gold mining companies with declining production costs. At their very core, by reducing costs, these miners are able to stay in business for the long term and set themselves up for massive rewards when gold prices increase.
It must be said; the companies I’ll be discussing are mere examples of what investors should be looking for when assessing a mining company. These are not buy or sell recommendations.
Investors should also be paying attention to other factors when searching for mining companies. When times are tough, available cash on hand and management of the company also become very important.