Gold miners' profits may be near record highs after a five-fold rise in the gold price over the past decade, but you wouldn't know it from their share prices - and investors are getting impatient.
The FTSE Gold Mines Index - encompassing major gold miners around the world with production of more than 300,000 ounces a year - has fallen nearly 40 per cent from the highs of last year, despite a less dramatic 15 per cent fall in the price of gold over the same period. Huge cost overruns and expensive takeovers near the top of the market have hurt even the best-run companies - and investors are seething over the broad share price underperformance and non-corresponding generous pay packages of executives.
As has been the case with several other sectors this year, this pressure has led to a number of high-profile oustings of top executives. The world's largest gold miner by market capitalisation and production, Barrick Gold of Canada, fired its chief executive Aaron Regent in June shortly before admitting capital costs at the company's huge Pascua Lama project on the border of Chile and Argentina have shot up by $3bn (£1.9bn) to $8bn. The company also shelved two other major projects and reported production problems at a flagship mine acquired in its $7.5bn (£4.6bn) takeover last year of Equinox Resources.
Last week, Canada's third-largest gold miner by market capitalisation, Kinross Gold, fired chief executive Tye Burt for similar reasons after seven years in the job. Rumour has it that a third chief executive of a major gold miner is set to go shortly.
