4. Future Pascua-Lama production
Barrick Gold Corporation (USA) (NYSE:ABX) is targeting first production at this project on the Chile/Argentina border for the second half of 2014. Pascua-Lama has almost 18 million ounces of proven and probable gold reserves. The expectation is that it will produce an average of 800,000-850,000 ounces of gold and 35 million ounces of silver in its first full 5 years of operation.
5. Moving towards greater efficiency
They’ve instituted a total review of their overhead across all elements of their business. Of note to investors is that Barrick Gold reduced 2013 total overhead costs by more than $100 million. More upside here is that the company, via their review process, expects more cost savings.
The potential exists for these savings to settle into their bottom line. Improving operational efficiency can lead to greater profit margins, greater production, which is all added value to the company and their shareholders.
Furthermore, investors may want to consider Pan American Silver Corp. (USA) (NASDAQ:PAAS) to top up their precious metals portfolio. The company recently reported that Proven and Probable silver mineral reserves increased to nearly 317 million ounces (as at Dec. 31, 2012).
Of significance for investors is the statement by Mr. Michael Steinmann, Pan American Silver’s Executive Vice President, Corporate Development and Geology; he said in February 2012, “Mine-site exploration has always been an important value driver for Pan American, allowing for organic production growth. Since 2004, the Company has added 229.4 million ounces of silver to its mineral reserves solely through exploration activities, excluding acquisitions, and more than replaced the 196.3 million ounces of silver mined during the same period.”
Therefore, the company is building shareholder value via their core exploration activities. Any acquisitions they undertake are as gravy added to an already delectable pot. The company has seven operating mines. Their expectation for this year is to invest $16.3 million to complete approximately 124,000 meters of diamond drilling at these mines.
Of further significance for investors is dividends; Pan American announced in February 2013 that their Board of Directors approved the first quarterly cash dividend of the year. They increased the amount of the quarterly cash dividend by 150% to $0.125 per common share.
The takeaway
As investors, you can make new friends and keep top performing old ones in your portfolio. It means staying abreast of what these companies are doing in terms of their going forward strategy. Remember, “Silver is precious, Gold is too…” and hopefully your portfolio stays that way too.
The article 2 Precious Metal Stocks That Could Drive Your Portfolio Higher originally appeared on Fool.com and is written by Michael Ugulini.
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