Insight
Value creation in the mining sector: A long term divergence between copper and gold producers
This report is currently unavailable
Report summary
In one of the most significant divergences observed across the mining sector, gold miners - which in the year 2000 commanded a 50% market premium over copper miners, have seen their relative valuations erode and now trade at a 25% discount relative to copper miners. We've tracked nineteen gold and pure play copper companies over a fifteen year period and discuss how and why the copper sector has outperformed despite gold prices rising faster than copper prices over the analysis period.
Table of contents
-
Executive summary
- Copper miners have outperformed gold miners significantly
- The approach to capital allocation has dictated the divergence in returns between the copper and gold sectors
- Cross-sector performance between 2000 and 2015
- Understanding long term value creation in the mining sector – net worth per share growth
- M1 and residual cash flow margins and dividend policy across the two sectors
- External financing in the copper and gold sectors between 2000 and 2014
- Business growth versus per share business growth diverge – shareholder dilution
- Randgold Resources and First Quantum Minerals shine
- Erosion of gold mining premium and state of the industry
- Conclusions and outlook
- Methodology
Tables and charts
This report includes 10 images and tables including:
- Value creation in the mining sector: A long term divergence between copper and gold producers: Table 1
- Miners share price appreciation along with underlying commodity prices from 2000-present
- Tracking the correlation between tangible net worth per share and share prices for nineteen mining companies between 2000 to 2014
- A comparison between copper and gold miners residual cash flow margins from 2000-2015F
- A comparison between copper and gold miners dividend payout and yield between 2000-2014
- A comparison in the total shares outstanding and total debt growth between the gold and copper sectors between 2000 and 2014
- A comparison of business net worth of selected copper and gold miners compared with net worth per share between 2000 and 2014
- A comparison of net worth per share and share price for Randgold Resources and First Quantum Minerals
- Valuation and leverage of gold and copper miners
- Share price, net worth and metal prices for gold and copper miners
What's included
This report contains:
