Two Under-$5 Gold Stocks to Launch a Portfolio: IAMGOLD Corp. and Kinross Gold Corporation

IAMGOLD Corp. (TSX:IMG) (NYSE:IAG) and Kinross Gold Corporation (TSX:K) (NYSE:KGC) have an attractive entry price for investors looking to start a portfolio.

| More on:
The Motley Fool

Looking to start a portfolio without breaking your bank account? Want some exposure to the mining industry at the same time? These two gold companies offer precious metals exposure at an inexpensive price. Each is endeavouring to control costs while boosting production to foster efficient growth.

IAMGOLD Corp. (TSX: IMG) (NYSE: IAG) has five operating gold mines and one of the world’s top three niobium mines. Its operating gold mines include current joint ventures. In 2013, the company unveiled its three strategic priorities of cost reduction (aiming for cost reductions of $100 million), cash preservation, and capital discipline.

The company’s focus is on controlling expenditures, and it is realizing success on this front. For Q2 2014, its all-in sustaining costs (gold mines) were $1,136 per ounce sold versus $1,251 per ounce sold from Q2 2013 and $1,198 per ounce sold from Q1 2014.

IAMGOLD’S gold production increased from Q1 2014. Its Essakane gold mine in Burkina Faso — 90% of which it owns, with the government of Burkina Faso holding the rest — saw production increase by 35%. In Q2, IAMGOLD had higher grades and throughput at Essakane, whose mill expansion drove throughput up considerably and is propelling growth in production. Subsequently, the company is now emphasizing improving its cost structure.

Its Niobec underground niobium mine is in Quebec, and encompasses roughly 1,735 hectares. It consists of two mining leases and includes 43 claims totaling 1,605.6 hectares. This mine continues to be a strong performer for IAMGOLD.

Furthermore, the company commenced commercial production at its Westwood Project in Quebec on July 1, 2014. IAMGOLD holds this project 100%. The Westwood Project encompasses 1,925 hectares, and consists of 120 titles, one mining lease, one surface lease, and three tailings leases.

Then there’s the world’s fifth-largest gold producer, Kinross Gold Corporation (TSX: K) (NYSE: KGC), which also focuses on cost controls while advancing production. Its Q2 2014 all-in sustaining cost came in at $976 per Au eq. oz. sold, versus $1,038 in the same quarter last year.

Regarding Q2 2014 results,  CEO Paul Rollinson said,Kinross’ focus on financial discipline and operational excellence continues to deliver results, with another strong quarter that puts the Company at the high end of its 2014 guidance range on production, and the low end of its 2014 guidance range on costs at the half-year mark.”

Kinross Gold has operating mines in the U.S., Russia, Brazil, Chile, Mauritania, and Ghana and development projects in Chile and Mauritania. It has development and grassroots exploration in Canada and Mexico, and is engaged in exploration at its Fort Knox mine in Alaska, Round Mountain mine in Nevada, as well as Kettle River-Buckhorn mine in Washington.

The company’s Kupol and Dvoinoye, Russia operations had higher production versus Q1 2014 and year over year. Kinross processed higher grade ore from its Dvoinoye operation in Q2. Kinross’ outlook for this year is that it will produce around 2.5-2.7 million gold equivalent ounces. Last year, the company had record production of 2.63 million gold equivalent ounces.

The expectation is that Kinross Gold’s potential Tasiast mill expansion (Mauritania) will produce approximately 850k oz. at approximately $500/oz. average for the first five years. The mill expansion could add a significant source of new production, lower Kinross’ overall cost structure, and produce substantial cash flow.

To me, you can’t go wrong with either stock to start off your portfolio.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

More on Metals and Mining Stocks

stock market
Metals and Mining Stocks

Is Barrick Gold Stock a Buy in 2024?

Barrick Gold (TSX:ABX) is often regarded as one of the best precious metal stocks to own. But should you buy…

Read more »

sale discount best price
Metals and Mining Stocks

3 Cheap TSX Stocks to Buy Right Now

TSX stocks such as Barrick Gold and two others are trading at a cheap multiple and at a discount to…

Read more »

A miner down a mine shaft
Metals and Mining Stocks

3 Copper Stocks to Buy as the Commodity Continues to Soar

Are you looking to get in on the growth of copper stocks? These are the biggest heavy hitters out there…

Read more »

Hands holding trophy cup on sky background
Metals and Mining Stocks

The Best Gold Stock to Invest $1,000 in Right Now

Agnico-Eagle Mines is my favourite gold stock to own, due to its low-risk profile and strong dividend history.

Read more »

Diggers and trucks in a coal mine
Metals and Mining Stocks

1 Canadian Mining Stock Worth a Long-Term Investment

Cameco (TSX:CCO) stock could be a great long-term investment for Canadian growth seekers.

Read more »

Stocks for Beginners

Got $200? 1 Copper Stock to Buy and Hold Forever

This copper stock is worth its weight in gold. Or actually, in copper! Given that the price of the material…

Read more »

A miner down a mine shaft
Metals and Mining Stocks

Lundin Stock Looks Like a Deal After Earnings

Lundin (TSX:LUN) stock fell slightly after earnings that were lower than the previous two quarters, yet copper demand remains high.

Read more »

Hand writing Time for Action concept with red marker on transparent wipe board.
Metals and Mining Stocks

3 No-Brainer Copper Stocks to Buy With $200 Right Now

Are you looking for growth? These three copper stocks have been on a tear, with even more predicted in 2024…

Read more »