Miners Under Pressure: Can Gold Stocks Survive a Price Correction?

Gold mining stocks are flashing distress signals, with the NYSE Arca Gold Miners Index underperforming bullion by 14% during the recent pullback – its worst divergence since 2022.

Cost Pressure Analysis:

• All-in Costs: Industry average now $1,480/oz (+18% YoY)
• Problem Projects:
  • Newmont’s Yanacocha issues (costs soar to $1,700/oz)
  • Barrick’s Pueblo Viejo expansion delays
• Energy Inflation: South African mines hit by 32% power cost jump

Investor Exodus:

• VanEck Gold Miners ETF (GDX) sees $890M outflows
• Short interest hits 3-year high at 8.7% of float
• Dividend cuts likely at 4 major producers

Survival Strategies:

1. High-Grading: Focusing on best ore bodies
2. Streaming Deals: Wheaton preps $2B royalty fund
3. M&A: Newmont may divest 5 non-core assets