While the value of a gold mining stock is closely correlated with the gold price, expected future earnings of the company also affect the performance of the stock. Beyond factors such as a company’s dividend pay-out ratio, financial health and market position, potential gold investors should also carefully consider a company’s mining costs, management, existing mine portfolio, reserves, exploration and expansion opportunities at both existing and new assets.
Miners with high-quality assets and efficient production systems and processes are able to remain profitable even when the price of gold is down.