The gold producers were not quite the rock stars this week as they have been in previous years at the Diggers & Dealers bash in Kalgoorlie.
Some of them were beaten up share price-wise before they even got inside the big tent at the conference. And when they did not have a compelling growth story to tell as an offset to gold price weakness, it got ugly in some cases.
In previous years, the gold producers would stroll in without a care in the world. The Aussie dollar gold price remained at historical highs, cost deflation was doing its work and all investors wanted was steady-state production with no surprises.
A focus on the quality of the ounces and not the volume became the mantra.
It was a response to investor demands for capital restraint in the post mining boom world, and their preference for companies to avoid the risky merger and acquisitions space. It worked a treat too, with the ASX-listed gold stocks strong performers in the past couple of years.
But as the 15 per cent share price hits for some of the leading gold producers in the past month has shown, the game has changed. Forecast cost increases and flat-to-lower production was the common factor in the share price setbacks.
But a bigger thematic was at play- investors now want growth. The quality of the ounces remains a key concern. It’s just that investors want to see more of them. Read more +
