FTSE 350 Review: The gold miners best-placed to grow

Gold hit a new record high at the end of last year, and has floated above the $2,000 an ounce (oz) mark since. Gold and silver companies have not enjoyed the same progress, with equity and earnings upside limited by investor caution and higher costs. A longer-term view points to the tough time mining investors have had; in the past five years, only Endeavour Mining (EDV) has come close to matching the gold price. 

The sector-wide view is narrow in this case because of the small number of miners in London’s top two indices. But there is value there, given the path of the gold price and the fact miners are now getting a hold on costs. The smallest of this cohort, Centamin (CEY) just announced a lower-than-expected all-in sustaining cost for 2024, raising profit expectations. 

The Egyptian miner did report higher operating costs for the second half, however, so the outlook is not entirely set fair. Still a one-mine play, Centamin is also throwing cash at more drilling in the same region as its Sukari mine. 

Meanwhile, Endeavour has just parted ways with chief executive Sébastien de Montessus with a dramatic series of accusations, knocking the shares and raising questions over the company’s broader governance. The company has itself flagged governance issues, and is now trying to claw back the $10mn (£7.9mn) de Montessus was paid in 2021, following an investigation by the board into an "irregular payment" he made in relation to an asset disposal. The company does not allege that de Montessus benefited personally from the instruction.

The other three precious metals specialists had a less dramatic 2023. Hochschild Mining (HOC) received its long-awaited permit for an expansion of the Inmaculuda mine in Peru, and its share price rebounded to over 100p, a 40 per cent bounce. The miner was also boosted by its new Brazilian operation, Mara Rosa. Having a mine outside Peru also cuts the single-country risk discount applied. 

Hochschild’s adjusted Ebitda is expected to climb by 22 per cent this year to $289mn, as per broker Peel Hunt, although this is still $100mn below the 2021 figure.