Posted on 06 January 2012.
Thebest gold stock to buy is, like the best of anything else, a somewhat subjective concept. Being the best gold stock can mean that a stock has the greatest opportunities for growth. It can mean having the largest market capitalization or lowest cost of production. It can even mean that the company has the largest amount of proven reserves. Here are a few candidates that are contenders for the crown based on differing attributes.
Well-managed Primero Gold of Mexico, PPP:NYSE is largely undervalued in relation to its rising output and growing list of proven reserves, which are currently estimated at 2.9 million ounces of gold and an additional 242 million ounces of silver. Primero’s main issue is that it is engaged in a tax dispute with the Mexican government and its silver-mining partner, Silver Wheaton Corporation. Primero’s current market cap of $274 million means that investors regard its silver as being valueless and its gold reserves as worth only $100 an ounce. Resolving these legal disputes will cause the stock to go ballistic.
United States gold stock Allied Nevada Gold, ANV:NYSE, plans on ramping up output by an estimated 600% between now and 2015. In addition to having a tremendous producer in its Hycroft mine, ANV realizes significant silver revenues on top of its gold production. Allied has also been buying up other promising properties in the Nevada area that create a portfolio with significant growth prospects ahead. Political stability plays a part with ANV as well. Regime change can wreak significant damage on overseas mining operations, while Allied remains a home grown super producer. While not as flashy as other mines, ANV certainly deserves inclusion as a best gold stock to buy.
Goldcorp, GG:NYSE, produced 2.4 million ounces of gold in 2011 and expects to jump that up to nearly 4 million ounces by 2015. They are also sitting on a hoard of 1.5 billion dollars in cash and another 1.5 billion in a standby line of credit. This gives them plenty of muscle for acquisitions of breakout operations. Any of these operators can stake a claim to the title of best gold stock to buy.
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