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3 Gold Shares Rising Strongly: Randgold Resources, Petropavlovsk, and Alamos Gold

LONDON -- Gold made a decent recovery last week, and gold for immediate delivery ended the week up by 3.6% at $1,465 per ounce.

Of course, the only practical way for most private investors to invest in gold is through exchange-traded funds. The largest gold ETF, the $51 billion SPDR Gold Trust  (NYSEMKT: GLD  ) , ended the week 2.1% higher at $140.91, while London-listed Gold Bullion Securities  (LSE: GBS  ) climbed 3.9% to end the week at $142.32. So far this year, shareholders of Gold Bullion Securities have seen the value of their holdings fall by 8.6%, while the value of SPDR Gold Trust shares has fallen by 13.6%.

Gold's big movers
Several miners strongly outperformed the rising price of gold last week. Here are three of the biggest risers:

Randgold Resources  (LSE: RRS  ) climbed 10.4% to 5,026 pence last week, helped by news that asset manager BlackRock had increased its holding in the company to more than 14% -- equivalent to around £670 million. Randgold's production costs are lower than many of its peers and the FTSE 100 company has net cash and adequate financing in place to meet its requirements, setting it apart from many other gold-mining firms, which are struggling to maintain profitability, service debt and raise new funding.

Petropavlovsk  (LSE: POG  ) climbed 6.9% to 154 pence last week. Investors were cheered by news that first-quarter gold production was 136,800 ounces, 13% higher than the same period in 2012, and that the company has hedged almost half of its gold production through to March 2014 at $1,663 per ounce, considerably higher than the current sub-$1,500 per ounce gold price. However, Petropavlovsk's net debt of $1.2 billion remains a worry, and there is a possibility that the firm may breach its banking covenants in 2014, when a substantial portion of its debt is due for repayment.

Alamos Gold  (NYSE: AGI  ) gained 9.6% to $13.39 last week after it reported first-quarter earnings of $0.21 per share on revenues of $86.3 million, beating analysts' expectations of $0.20 per share on revenues of $82.9 million. Alamos expects to produce between 180,000 and 200,000 ounces of gold this year at an attractively low cash operating cost of between $415 and $435 per ounce, which should enable it to remain profitable at lower gold prices than some of its peers.

Shares vs. commodities
Shares in commodity companies have outperformed their underlying commodities many times over the last ten years, thanks to their ability to magnify their gains through successful development of new resources. This free report from the Motley Fool, "10 Steps to Making a Million From the Market" contains some excellent tips on identifying and investing in potential multibagger shares, including resource shares like gold miners. I strongly recommend that you click here and download it now, as it will only be available for a limited time.


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Related Tickers

9/29/2016 12:59 PM
AGI $8.30 Up +0.09 +1.10%
Alamos Gold CAPS Rating: **
POG $7.00 Up +0.18 +2.64%
Petropavlovsk CAPS Rating: No stars
RRS $7874.39 Up +124.39 +1.60%
Randgold Resources… CAPS Rating: No stars
GBS $125.19 Down -0.30 -0.24%
ETF Securities Gol… CAPS Rating: No stars
GLD $126.10 Down -0.12 -0.10%
SPDR Gold Trust CAPS Rating: **