Goldcorp Inc. (USA) (GG), Newmont Mining Corp (NEM): Why GOLD Should Shine in Your Portfolio

The company is a strong believer in joint ventures with local partners, who are usually the government. This is why they do not own 100% of any of their mines. However, by retaining operational control while fostering community relations via employment and home building programs, the company has an attractive set-up. The company appears popular with governments in the region because of these attributes. This is very important in a region which has seen civil strife and political uncertainty.

Second, the big production growth driver for Randgold is the creation of a new mine called Kibali. Even adjusting for other proportional interests, on a reserve basis this is a huge mine which Randgold expect to start production from later on in 2013. This will be a seminal moment for the company and augments an already strong asset base as it will be a high grade mine.

Of course there are challenges – politics are rarely super smooth in Africa and the company does continue to have some issues around electricity/energy provision to one of its mines. But, in my opinion, the positives significantly outweigh the negatives.

I think that Randgold’s share price performance versus most of the other large gold companies should start to positively differentiate from here.

The article Why GOLD Should Shine in Your Portfolio originally appeared on Fool.com and is written by Chris Bailey.

Chris is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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