Truly golden era for big gold shareholders

WITH stakes worth tens of millions in the companies they lead, Bill Beament and Jake Klein are among the biggest individual winners from the surge of interest in Australian gold stocks that’s continuing to play out on the ASX.
Truly golden era for big gold shareholders Truly golden era for big gold shareholders Truly golden era for big gold shareholders Truly golden era for big gold shareholders Truly golden era for big gold shareholders

Big gold miners have been reigning supreme of late on the ASX. Image: iStock/dimdimich

Beament's stake in Northern Star Resources is currently worth up around the A$70 million mark while Klein's shares in Evolution had a market value this week of nearly $45 million.

And that's not taking into account the big slabs of performance rights both have that could notionally add many more millions to their net worth should they vest further down the track.

The two executive and their fellow shareholders have seen the share price of their respective companies rise nearly 50% over the past 12 months, while others at Regis Resources for example, (including executive chairman Mark Clark and big company backer Nick Giorgetta), have also enjoyed strong capital appreciation of their significant shareholdings through the same period.

The gains have continued even over the past couple of months as the Australian dollar gold price softened 3-4%, with the likes of Northern Star, Evolution and Regis all still seeing gains of more than 10% over the same period.

The basis for the continuing surge are varied, though there's one overriding and very simple reason according to one experienced analyst contacted by MNN: "Australian gold miners are the most profitable they've been in living memory".

Strong cost control and a strong Australian gold price of circa-$1700 per ounce have produced the margins that have seen gold miners generally raking in the cash - such that even dividends are becoming a bit of a norm!

Global investors are believed to have become increasingly cognisant of the situation ‘Down Under', with the small pool of significant gold producers with strong margins and relatively long mine lives  also seen as benefiting from "set and forget" investing.

Further, buying of ASX gold miners this year by big investment firm Van Eck is seen as being an influence, given the New York-headquartered fund's status as a bit of a "bellwether".

Another potential factor in more recent buying is the expectation of strong production quarterly reports and good news flow ahead of the flagship Australian conference for gold producers in early August that is Diggers & Dealers in Kalgoorlie.

Suggestions of M&A speculation being behind some of the buying were more coolly met by analysts (given stretched and stretching valuations), though one wryly noted that the majors typically seemed to return to sectors they may have previously left - such as the Australian gold sector - around the top of the market.   

Another long on Northern Star also suggested the miner's underground mining sector-leading expertise could be of interest. 

Whatever the reasons, it all represents rather spectacular period for the bigger end of the ASX gold sector.

Especially for some!