Gold is flying but miners are left in the dirt

Author: Alan Livsey
Source: Financial Times

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Cheap targets abound, with some juniors reaching point where investment needs of projects look overwhelming.

When the world’s largest gold miners by market value prefer to discuss copper projects, the shiny metal might have an image problem.

The gold price this week hit another record high, above $2,100 per ounce. Expectations of lower US interest rates and persistent demand from Chinese households are two reasons for this.

But the biggest miners, such as Newmont and Barrick, haven’t enjoyed the same success. Shares of Denver-based Newmont Mining have fallen into a pit, down 25 per cent over one year. This follows Newmont’s deal to buy Australia’s Newcrest last February for an increased price of $19.5bn, too rich for shareholders. Barrick shares have also struggled. It has plans to build a copper-gold mine in geopolitically risky Pakistan.

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