Gold Juniors Offer Better Investment Proposition

Source:

The number of gold juniors which have recently emerged in South Africa allow significantly better geared exposure to the gold price as many of them offer more than one revenue stream and they mostly mine at significantly shallower depths than the gold majors, said RBCCM analyst Leon Esterhuizen in a report.

South African junior gold companies offer a better investment proposition compared to majors as they are set to capitalise on a markedly higher gold price, while majors are grappling with high costs and power supply problems.

The number of gold juniors which have recently emerged in South Africa allow significantly better geared exposure to the gold price as many of them offer more than one revenue stream and they mostly mine at significantly shallower depths than the gold majors, said RBCCM analyst Leon Esterhuizen in a report.

And while the potential of lower costs and higher margins is backed by significant capacity for production growth over the next couple of years, the current valuations of many juniors are fortunately very low, he said.

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