Mid-tier gold miners are outperforming industry giants by pursuing smaller project for lower costs.
According to Julie Gordon writing for Reuters, modest-sized gold miners are beating the industry giants, whose capital costs are soaring due to the pursuit of multi-billion mega projects.
Centuries of exploitation mean large gold deposits are now scarce, forcing mining giants to construct huge mines in remote regions. This in turn requires companies to foot the bill for the construction of their own specialist infrastructure.
Small mine can be built for a fraction of the cost, however, and are not beleaguered by any of the complications or logistics problems of the mega mines.
As a consequence, mid-tier firms such as Yamana Gold Inc. (TSX:YSR) and Alamos Gold Inc. (TSX:AGI) are currently outperforming Toronto Stock Exchange's S&P/TSX Global Gold Index., which has plunged 24% this year due to tepid gold prices and ballooning costs.