As subscribers know, at MM, we are bullish gold, but as we always do, we question whether we have the optimum exposure for this view – so far in 2024, Evolution (EVN) has slipped -6.1% while Newmont (NEM) has gained +7.9%. Over the last 12-months there has been some major news for both companies:
- Newmont (NEM): In November, NEM, the largest gold producer in the world, acquired local heavyweight Newcrest (NCM) for $16.8bn. NCM shareholders now own part of the dual-listed NEM, a huge $75bn diversified gold producer that receives over 90% of its revenue from precious metals and less than 5% from copper.
- Evolution (EVN); In December, EVN paid $720mn for Northparkes’s copper/gold mine, raising capital at $3.80 to fund the acquisition, EVN is a comparatively small $7.4bn gold producer. Over the coming years, EVN is tipped to receive 70% of its revenue from gold and ~30% from Cu.
The question we pose today is whether NEM will maintain this outperformance in the second half of 2024 in a sector that has frustrated many, including ourselves, at times. Very few have paced the performance of gold itself, which has made all-time highs in recent months, with operational delivery as a common factor for the producers.
