2020 was particularly profitable for gold producers
As Metals Focus, a leading independent precious metals consultancy, has found, the average AISC (All-in-Sustaining Cost) margin - gold price minus cost of production - reached a record US$828 per troy ounce in 2020. The old record was 666 U.S. dollars in 2011. This extremely positive development clearly led to greater profits for gold mining companies; after all, the gold price recorded a record high last year.
The licensing and streaming companies in the precious metals sector also enjoyed a successful 2020. Some companies in this sector achieved record results. These companies receive royalties on mine production from mine operators. In return, they support the project operators with financing.
And there are good reasons to back royalty companies. For one thing, they have hardly any operating risk, as this lies with the partner companies. And secondly, they need significantly less capital for personnel or for development and operating costs of projects than precious metal companies. In addition, royalty companies are more broadly positioned, as they usually have a large number of projects in their portfolio. This also makes royalty companies easier to calculate than precious metal companies.
Among the royalty companies that brought in record revenues and cash flows in 2020 is Osisko Gold Royalties - https://www.youtube.com/watch?v=VOZAwoLV71s. The company is broadly diversified, with exposure to about 140 projects.
Gold Royalty Corp, a subsidiary of GoldMining - https://www.youtube.com/watch?v=RWE053gmQ7A -, is also among the royalty companies. GoldMining owns prospective and large gold and gold-copper projects in North and South America. GoldMining's gold resources amount to a good 26 million ounces.
Current corporate information and press releases from Osisko Gold Royalties (https://www.resource-capital.ch/en/companies/osisko-gold-royalties-ltd/) and GoldMining (https://www.resource-capital.ch/en/companies/goldmining-inc/).
In accordance with §34 WpHG I would like to point out that partners, authors and employees may hold shares in the respective companies addressed and thus a possible conflict of interest exists. No guarantee for the translation into English. Only the German version of this news is valid.
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