While the recent win for centrist Emmanuel Macron in the French election took some of the pressure off the world’s geopolitical environment, things are still kind of dicey out there. Slowing growth, rising tensions and overall overpriced equities are just some of the risks facing investors. That’s great news for gold stocks — especially those former highfliers that have been beaten down over the past few years.
So far, the issues facing the world’s economies has helped push gold up to over $1230 per ounce. For gold stocks, this high dollar amount for gold is more than enough for them to start making meaningful profits and producing real cash flows.
That’s because many gold stocks have only improved their all-in sustaining costs (AISC) by cutting capex and other operating expenses during the downturn. With jumps in gold prices like these, the various gold stocks are once again becoming worthy of investment.
But what’s excellent is many of the former highfliers can now be had for less than a value meal at your local burger joint. With that in mind, here are seven gold stocks to buy that cost less than $7 per share.
Cheap Gold Stocks to Buy: Kinross Gold (KGC)
Current Share Price: $4.15
During the boom years, Kinross Gold Corporation (USA) (NYSE:KGC) was one of the brightest gold stocks with a plethora of properties across North and South America, Asia and Africa. But its crown jewel was its newly purchased Tasiast gold mine.
Tasiast was set to be a monster for KGC and power production and profits over the long haul. The buyout was totally worth the debt when gold was trading near $2,000 per ounce. The problem was that gold pretty much crashed right after the buyout. KGC stock suffered over the past five years or so. But there is hope for the gold stock. Since its debt-fueled binge, KGC has managed to reduce its costs to the point that current gold prices allow it be profitable. Moreover, it’s continued to reduce its cost further this quarter. The real win is that Kinross is finally starting move ahead with Tasiast.
Thanks to an expansion plan at the mine, management expects production at Tasiast to nearly double when the development comes online during the beginning of 2018. That should drive cash costs at the mine down to just $760 per ounce. That’s a heck of a lot of future profits for KGC, even if gold does take a dip.
With a share price of under $4, investors n KGC today could be sitting on a big-time double in roughly a year.
Cheap Gold Stocks to Buy: Yamana Gold (AUY)
Current Share Price: $2.69
After its massive 10% drop post-earnings, it’s hard to get behind former star Yamana Gold Inc. (USA) (NYSE:AUY). But when shares of AUY can be had for less than a cup of coffee, it’s time to take notice.
The reason for AUY’s recent headache was an impairment charge on a recent spin-off that caused the firm to lose money during the first quarter of the year. No one saw the charge coming, and it sent shares of the mid-tier miner down. But without the charge, AUY was profitable and will continue to be so with gold currently trading for over $1,200 per ounce.
That’s because it has several catalysts pushing it forward. AUY’s two new projects — silver heavy Cerro Moro and gold-focused Chapada — are estimated to meaningfully help produce cash flows at the firm when they kick on over the next couple of years. Moreover, sales of non-core assets will continue help bolster the firm’s cash holdings and reduce debt. In the end, the positives outweigh the negatives at AUY.
That could help explain why analysts now estimate that shares of Yamana could surge more than 60% over the next year or so. Making this one of the “glitteriest” low-priced gold stocks around.
Cheap Gold Stocks to Buy: IAmGold Corp (IAG)
Current Share Price: $3.67
When it comes to the junior gold stocks, IAmGold Corp (USA) (NYSE:IAG) has exactly what investors should be looking for. The problem is investors have been looking somewhere else for it. After being one of the sector’s rising stars, investors have abandoned shares of IAG and now they can be had for under $4. That’s a heck of a deal for patient owners.
For starters, its Côté Gold Project in Ontario promises to be a huge source of future production for the gold miner, as it features large reserves and close proximity to already existing infrastructure. The size and quality of the mine also provides IAG will plenty of buyout potential.
Meanwhile, IAG is currently profitable and continues to see rising cash flows from higher gold prices. Driving that was its strategy of hold gold for investment purposes and selling when prices were high as well as its continued focus on reducing its cash costs.
And yet, the market continues to throw IAG stock away. For investors looking for one of the unsung heroes among gold stocks, Iamgold could be it.
Cheap Gold Stocks to Buy: Hecla Mining (HL)
Current Share Price: $5.39
Silver, unlike gold, is more of industrial play rather than a store of value. It’s found in a wide range of applications, and many of those applications actually destroy the silver when used. Rising economic activity will ultimately boost demand for the metal in the long run.
But in the slowing growth environment, that could be seen as bearish.
Luckily, HL features a growing gold production division. After making a series of buyouts back in 2014, Hecla has continued to grow its gold production. With prices rising here, HL has performed better over the past quarter, which lead to its big one-day jump. And the gains could keep coming as HL’s mien features some of the highest grade gold and silver ore. This improves profits margins as well as HL’s ability to sell its gold at higher prices.
And lest we forget that Hecla also has a pretty good copper and zinc business as well. In the end, at just over $5 per share, the diversity of products makes HL a mean double play on rising silver and gold prices.
Cheap Gold Stocks to Buy: Harmony Gold Mining (HMY)
Current Share Price: $2.18
There’s no sugar coating the recent performance of Harmony Gold Mining Co. (ADR) (NYSE:HMY) — it’s been pretty much all downhill.
The problem comes down to location. HMY owns several open-pit mines in South Africa. While the nation is politically stable, it isn’t prone to issues. Continued weakness in the South African Rand hasn’t helped Harmony’s fortunes. Add in the region’s higher costs of operation — thanks to labor and electricity issues — and you can see why the miner has a cash cost of nearly $1,000 per ounce.
And it also helps explain its terrible performance. But with gold at its current high of $1,200, things should start to grind forward for Harmony. The firm managed to record profits and an 8% operating free cash flow margin year to date for its latest reporting period.
HMY isn’t as sure of a sure thing as the other gold stocks on this, but at just over $2 is a better turnaround gamble than a lotto ticket.
Cheap Gold Stocks to Buy: B2Gold Corp (BTG)
Current Share Price: $2.24
Considering its $2.24 per share price tag, you’d think that B2Gold Corp (NYSE:BTG) is some throwaway firm. But in reality, it’s one of the fast growing among all the gold stocks. The reason has been its focus on using cash flows to finance mining capex rather than turn to the debt markets.
As a result, BTG has been able to meaningfully boost production by a lot. Last year, the gold miner managed to produce 550,423 ounces of gold. This year it’s on track to mine around 595,000 ounces. That number should grow to whopping 900,000 ounces by the time the calendar finishes 2018. Higher gold prices are adding an extra boost to its effort to expand, and construction will be completed faster.
Because of its lack of debt and focus on conservative management, the firm’s AISC is a small $780 to $810 per ounce. That means that higher production is going to provide even more cash flows for BTG down the road.
For investors looking for one of the future stars amid gold stocks, B2Gold could be it. Even better, you can get BTG stock for less than your money coffee.
Cheap Gold Stocks to Buy: Alamos Gold (AGI)
Current Share Price: $6.68
Hitting the upper range of a fast food value meal is Alamos Gold Inc (US) (NYSE:AGI), and investors may want to choose AGI stock over the burger.
AGI’s main focus is on good old and safe North America — with two mines in Mexico and one in Canada. This includes the signature Young-Davidson mine in Ontario. This mine features low costs and a long reserve life. Perhaps more importantly, the site has been the home to two other world-class mines, and there’s plenty of mining infrastructure in place. That gives AGI one of the lowest cost profiles out of any miner.
So why isn’t Alamos stock more than $7? One word — Turkey.
Just before all the violence and issues surrounding the nation took hold, AGI began a development program in the nation. The mines are good, but there could be potential problems. So investors have stayed away. Other projects in Mexico and Canada are moving ahead full steam, however, and the Young-Davidson is still a beast regarding production.
For investors looking for low-cost gold stocks, AGI should be in your portfolio.
As of this writing, Aaron Levitt was long AUY, KGC and AGI stock.