Gold stocks continue to elicit strong interest on growing concerns about volatility in the global markets triggered by slow economic growth and trade tensions between economic powerhouses. Barrick Gold Corp (TSE:ABX) and Kirkland Lake Gold Ltd (TSE:KL) are some of the Canadian stocks well positioned to ride on the expected gains in the sector.
Canada Gold Output
Reports that gold production in Canada will grow at a compound rate of 2.7% between 2019 and 2023 affirm why it is the best time to take a keen interest on the Canadian gold industry. Data by GlobalData Mining Intelligence Center indicates that the country’s gold output will reach highs of 7.6 million oz. over the next four years.
Increased production stems from Canada’s dominance in attracting exploration investment that has helped bring more gold mines online. In 2017, the county had about 500 mining sites of which 300 dealt on gold and silver mining. In addition, provincial governments have continued to offer tax credits and assistance programs that have helped fuel mining activities.
Increased gold production in Canada also stems from growing exploration and mining activities at new mines in Agnico Eagles Meliadine mine in Nunavut as well as Victoria Gold’s Eagle project in Yukon. The Eldorado Gold Lamaque project in Quebec should also contribute to the expected gold output through 2019
Increased production at the new mines could propel Canada above the U.S to become the fourth largest gold producer in the world. The fact that very few Canadian mines face depletion and the fact that output is poised to increase four times, positions the country to be a major gold producer. Ecuador is another county that continues to experience an increase in gold output, thanks to ramped up mining operations at the Lundin Gold’s Fruta del Norte and INV Metals Loma Large projects.
Canadian Gold Stocks
Kirkland has emerged as one of the best plays for gaining exposure to the burgeoning Canadian gold sector. The stock has been on an impressive run over the past few years and is up by more than 50% for the year. The rally has come on gold prices rallying and stabilizing above the $1300 mark an ounce.
Headquartered in Ontario, Canada, the company has gold production operations in Canada and Australia. In 2018, it surpassed its target production level of 670,000 ounces of gold by producing nearly 724,000 ounces. The Company is on course for yet another impressive year on the production front as it continues exploration at the Fosterville mines.
Barrick Gold has started flying high after a period of consolidation in recent months. The stock is up by more than 10% for the year. With operations in more than a dozen countries, the company offers an excellent opportunity for gaining exposure in the mining sector.
Ranked as one of the biggest gold producers in the world, Barrick Gold continues to strengthen its footprint with the acquisition of Randgold Resources. Upon the merger, the company is to own five out of the world’s top 10 tier one gold assets.
A spike in gold prices in recent months, amidst the growing safe-haven appeal of the precious metal, should allow the likes of Barrick Gold and Kirkland to generate significant value from their mining operations.
