Some philosopher said that “a bird in hand is worth two in the bush.” But was that a philosopher, or was that a gold investor? Let me answer that question later.
Historically, gold mining companies have been marginal businesses. Thus, if you are going to invest in this area, a proper understanding of undervalued and overvalued situations is critical to outperforming in a mining investment.
While mining companies can deliver tremendous out performance relative to the broader markets, as it turns out, only a handful of companies generally deliver most of this value. So, how does an investor value a gold mining company, particularly a junior or mid-tier gold mining company?