Smaller gold mining companies expected to outperform market

ON SPECIALIST MARKETS

The gold price has been the subject of much debate recently as public debt problems continue to mount and investors look for stores of value alternative to the leading currencies.

We believe even if gold remains at current levels, smaller gold mining companies’ shares should outperform the market, the gold price and the sector. In 2009, investors focused on more liquid mid-capitalisation mining companies with trading liquidity, enabling them to adjust their investment strategy swiftly. This year we have seen the focus shifting towards smaller capitalisation companies. Junior miners with substantial reserves in the ground, growth in cashflow, little or no debt and experienced management teams that continue to explore and add to their reserve base are most likely to...