This was not one of them. Before you can launch, you need a steady foundation beneath you. Gammon's tally of 2010 production and cost figures from the Ocampo mining camp in Mexico offers investors the peace of mind to know that Gammon's launchpad is sound and secure.
Gammon's Ocampo mine produced 183,538 gold equivalent ounces (GEOs) during 2010 at a highly competitive cash cost of $422 per GEO. The company's record fourth quarter margin of $955 per GEO -- for a full 69% of operating revenue -- offers gold and silver investors a savory preview of soaring profitability from lower-cost mining operations.
Although miners often employ distinct methods to calculate costs, I nonetheless find Gammon's cost structure very appealing on a relative basis. Facing a tough transition year in its long-term growth trajectory, junior miner Northgate Minerals
Both gold and silver production increased at Ocampo during each successive quarter of 2010, highlighting a gathering momentum "in virtually every key performance indicator." With commercial production now under way at the exciting Santa Eduviges zone, and redeployed resources from the discontinued El Cubo mine accelerating the development of underground targets, I expect another solid year from Ocampo during 2011.
With Gammon's foundation of low-cost production secure, Fools are free to return their focus to the company's looming growth catalysts. From the company's board-welcomed bid to merge with competitor Capital Gold
I expect another terrific year overall for the miners of silver and gold, amid further pricing strength from the metals themselves. I have identified several potential outperformers within the industry, including some larger-cap names like Yamana Gold
The Fool owns shares of Northgate Minerals. Try any of our Foolish newsletter services free for 30 days
Fool contributor Christopher Barker can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He tweets. He owns shares of Coeur d'Alene Mines, Gammon Gold, Goldcorp, Northgate Minerals, and Yamana Gold. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a gilded disclosure policy.