April 29, 2021
With record margins and healthy cash flow in 2020, the mining sector is in position for a strong Q1 earnings season, says Douglas Groh, co-manager of Sprott’s Gold Equity Fund.
“It’s the best market I have ever seen for the mining sector,” he said in an interview with Kitco News. “Companies are in great shape and are in a strong position to give back to shareholders.”
Gold prices had tumbled 10% in the first quarter, but the sector remains strong, as most miners have clean balance sheets and less debt, allowing them to thrive in a lower price environment.
Some experts see the stars aligning for gold miners.
“In a recent interview with Kitco News, Douglas Groh, co-portfolio manager of the Sprott Gold Equity Fund, said that after all the excitement in 2020, miners saw record margins and unprecedented cash flow. Groh added that he is not expecting to see any significant fireworks for the first quarter of 2021,” reports Neil Christensen for Kitco News.
SGDM remains catalyst-rich, owing to rising inflation and miners’ dwindling costs, among other relevant factors likely to linger through the end of this year, if not beyond.
“2020 proved to be a wild ride for miners that had to navigate mine closures due to the COVID-19 pandemic and then ramp up production to capture all-time high gold prices. Groh said that many companies would take the first quarter to get back into their production rhythm,” according to Kitco.
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When Warren Buffett bought gold, it made headlines, although it wasn t gold he purchased so much as GOLD stock. Buffett has been bearish on gold for a long time, saying that gold doesn t really do anything but sit there.
However, Berkshire Hathaway s purchase of Barrick Gold shares doesn t necessarily signal a change in view, especially since it seems likely that it was one of Buffett s lieutenants who made the purchase. So will Barrick Gold and other mining stocks pay off in 2021? The bullish scenario for gold makes mining stocks look attractive, but not all of them will pay off equally.
Gold will disappoint investors in 2021 --- here s why the bulls arguments don t hold up marketwatch.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from marketwatch.com Daily Mail and Mail on Sunday newspapers.