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In this piece, we will take a look at the ten biggest gold companies in Canada. For more gold stocks, head on over to 5 Biggest Gold Companies in Canada.
In times of economic turmoil, there are a handful of assets that investors rely on. An economic downturn coupled with inflation reduces confidence in the stock market as share prices are likely to drop in the wake of corporations suffering from weak revenue. Naturally, this leaves limited avenues for investors to increase their value of money, and the current economic environment is no exception.
Throughout the course of this year, investors have abandoned the stock market and flocked to the U.S. dollar, as the Federal Reserve's consistent efforts to combat inflation have raised the interest that banks offer their customers. This had led to other currencies, such as the Great British Pound, to tumble, since the interest rates offered in the United States are among the highest in the world. The dollar's status as the world's reserve currency also leads to it becoming a stable asset to hold as the prices of others drop.
However, the big debate in markets right now is will the Federal Reserve reach the much awaited (or dreaded, depending on who you ask) 'pivot' soon. This will be when the bank decides enough is enough and that its efforts to control inflation have finally started to bear fruit. The U.S. dollar itself has been quite jittery lately, as investors are keenly watching currency fluctuations, and even a small hint that the Fed might stop its interest rate hikes soon results in the value of other currencies such as the Pound and the Euro increasing immediately.
Another indicator of the market's perception of a pivot is the gold price. Widely thought of as another stable investment, the only drawback of holding gold is that it does not pay interest. The strength of the U.S. dollar this year has led to gold prices dropping to multi year lows, and many analysts believe that once the dollar weakens, gold will go up.
Canadian Gold Industry: An Analysis
Therefore, now might be the right time to start looking at gold stocks. Canada has one of the largest natural resource reserves in the world, and its primary stock exchange, the Toronto Stock Exchange or TSX, has the bulk of the global mining companies. As of 2019, 48% of the world's mining companies were listed on either the TSX or the TSX-V, and 58% of all the global equity mining financing was done on the TSX during the same year. Canada produced $12.3 billion worth of gold in 2020, and was the world's fifth largest producer with an output of 182 tonnes, with Quebec and Ontario accounting for 71% of the total production.
Additionally, according to a research report from Mining Technology, Canada will drive the growth of global mining this year as well, as, by the end of 2022, it will have produced 7.7 million ounces of gold, marking an 11.4% increase. In second place is Australia, which grew production by 8.3%. Finally, the Russian invasion of Ukraine will also shift more gold production to the West in the wake of sanctions and other disruptions.
Today's piece will narrow down the top Canadian gold companies in the industry, and the top picks are Agnico Eagle Mines Limited (NYSE:AEM), Barrick Gold Corporation (NYSE:GOLD), and Yamana Gold Inc. (NYSE:AUY).
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Our Methodology
We took a broad look at the Canadian public stock market and sifted out the biggest gold companies. After this, they were analyzed through their financials, gold production, and market performance, following which they were ranked through Insider Monkey's 895 hedge fund survey for the second quarter of this year.
Biggest Gold Companies in Canada
10. Centerra Gold Inc. (NYSE:CGAU)
Number of Hedge Fund Holders: 10
Centerra Gold Inc. (NYSE:CGAU) mines gold and copper in several countries. These include its home country Canada and Turkey, and the firm has a full stake in the Turkish project.
Centerra Gold Inc. (NYSE:CGAU) has a fortress balance sheet, with a cash balance of $723 million and no debt. The company is also significantly undervalued, as its enterprise value had dropped by 71% by the end of August this year but the share price had dropped by only 23%. The company's Canadian mine has 4.4 million ounces of gold, and cumulatively, the firm has access to more than 280,000 tonnes of gold, and its inferred gold resources stand at a whopping 97,000 tonnes.
Centerra Gold Inc. (NYSE:CGAU) generates $314 million of free cash flow from its Canadian and Turkish mines, which is higher than its enterprise value of $305 million measured in August. Insider Monkey's Q2 2022 survey of 895 hedge funds revealed that ten had bought Centerra Gold Inc. (NYSE:CGAU)'s shares.
Out of these, Ryan Schedler and Bradley Shisler's Condire Investors is Centerra Gold Inc. (NYSE:CGAU)'s largest investor. It owns 6.9 million shares that are worth $47 million.
Centerra Gold Inc. (NYSE:CGAU), Barrick Gold Corporation (NYSE:GOLD), Agnico Eagle Mines Limited (NYSE:AEM), and Yamana Gold Inc. (NYSE:AUY) are among the top Canadian gold mining firms.
9. B2Gold Corp. (NYSE:BTG)
Number of Hedge Fund Holders: 15
B2Gold Corp. (NYSE:BTG) is a pure-play gold miner that operates three mines. These are located in the Philippines, Mali, and Namibia. The firm also owns stakes in other mining firms and it has exploration assets in Uzbekistan and Finland.
B2Gold Corp. (NYSE:BTG)'s mine in Fekola produces high quality gold, and it is capable of producing 3.4 grams of gold per tonne mined, making it one of the most efficient in the world. To put things into perspective, B2Gold Corp. (NYSE:BTG) has regularly mined 2.2 million tonnes of rock from the site per quarter, which leaves it with significant gold at hand.
B2Gold Corp. (NYSE:BTG) is also trading at 5.2 times its 2023 cash flow estimates, indicating that the stock just might have bottomed out. By the end of this year's second quarter, 15 of the 895 hedge funds studied by Insider Monkey had held a stake in the company.
B2Gold Corp. (NYSE:BTG)'s largest investor is Jim Simons' Renaissance Technologies which owns 36 million shares that are worth $123 million.
8. SSR Mining Inc. (NASDAQ:SSRM)
Number of Hedge Fund Holders: 15
SSR Mining Inc. (NASDAQ:SSRM) is a diversified mining company that has operations all over the globe. The firm mines gold, copper, zinc, and lead. It has mines in the U.S., Canada, Turkey, and Argentina.
SSR Mining Inc. (NASDAQ:SSRM) is another heavily undervalued gold company, whose share price and market value are significantly below the worth of its assets. For instance, with 222 million shares and a $14 share price, the company is worth $3.1 billion - yet it has a net asset value of $4.5 billion, roughly 45% higher than the market value. Additionally, the firm's full year cash flow estimates value it at a ratio of 7.9x, also lower than the ten year average of 8.7x.
Insider Monkey's June quarter of 2022 survey of 895 hedge funds revealed that 15 had bought SSR Mining Inc. (NASDAQ:SSRM)'s shares.
7. Alamos Gold Inc. (NYSE:AGI)
Number of Hedge Fund Holders: 19
Alamos Gold Inc. (NYSE:AGI) is a subsidiary of Alamos Gold. Its parent firm has three mines, two of which are located in Canada and one in Mexico. Additionally, it is also developing projects in Turkey, the U.S., and its home country.
Alamos Gold Inc. (NYSE:AGI) is aiming to produce up to 480,000 ounces of gold by the end of this year, by generating 925 million in costs. The firm's Young Davidson mine in Canada is documented to be worth $1.8 billion in 2026 when new production equipment is installed, which is almost double the mine's current value of $1 billion. Additionally, Alamos Gold Inc. (NYSE:AGI)'s Mulatos mine is recovering from earlier slumps, which the industry as a whole suffered from earlier this year, and in its second quarter, the mine produced more than 100,000 ounces of gold.
As part of their investment portfolios for this year's second quarter, 19 out of the 895 hedge funds polled by Insider Monkey had held a stake in Alamos Gold Inc. (NYSE:AGI).
Out of these, Jean-Marie Eveillard's First Eagle Investment Management is Alamos Gold Inc. (NYSE:AGI)'s largest investor through an $83 million stake that comes courtesy of 11 million shares.
6. Kinross Gold Corporation (NYSE:KGC)
Number of Hedge Fund Holders: 21
Kinross Gold Corporation (NYSE:KGC) is a global mining company that produces gold and reclaims gold mines. The firm's assets are located in the U.S., Chile, Ghana, Russia, and Mauritania.
Kinross Gold Corporation (NYSE:KGC) plans to buy back $300 million worth of its shares for the rest of this year, and the firm is also aiming to spend 75% of its post dividend and interest payments in 2023 and 2024 for share repurchases. This has the potential to grow its share price, as buybacks reduce the shares outstanding and end up driving up the share price. Additionally, Kinross Gold Corporation (NYSE:KGC)'s share price has fallen due to its Russian fields, but the firm has sold these assets, so the discount is all priced in.
21 out of the 895 hedge funds polled by Insider Monkey during Q2 2022 had invested in Kinross Gold Corporation (NYSE:KGC). It also pays a 3 cent dividend for a 3.28% yield.
Kinross Gold Corporation (NYSE:KGC)'s largest investor in our database is Jim Simons' Renaissance Technologies which owns 28 million shares that are worth $102 million.
Along with Agnico Eagle Mines Limited (NYSE:AEM), Barrick Gold Corporation (NYSE:GOLD), and Yamana Gold Inc. (NYSE:AUY), Kinross Gold Corporation (NYSE:KGC) is one of the largest Canadian gold mining companies.
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Disclosure: None. 10 Biggest Gold Companies in Canada is originally published on Insider Monkey.
