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The best gold mining stocks have a few advantages over buying physical gold.
For instance, stock certificates are cheaper and easier to store than is physical bullion. Additionally, gold mining stocks have a higher upside potential than does the actual metal. When gold prices rise, a company's stock can realize gains well past the jump in gold prices themselves.
Of course, the downside to investing in gold mining stocks is the reverse of that situation. When gold prices drop, gold mining stocks can fall more dramatically. And on top of that, when a mining business is under stress, they sometimes shut down their less profitable mines.
That's why it's so important to carefully select only the best gold mining stocks for your portfolio.
Money Morning Resource Specialist Peter Krauth believes that certain gold mining companies have managed to control and lower costs, focus on the most viable projects, and rein in capital expenditures.
Those are the kinds of companies you want in your portfolio, and below we've provided two of the best gold mining stocks that fit the bill.
Two of the Best Gold Mining Stocks
Goldcorp Inc. (NYSE: GG)
The second-largest gold corporation as measured by market value, Goldcorp operates by acquiring, exploring, developing, and operating gold and other precious metal properties in the Americas.
Goldcorp recently made the news by posting third quarter earnings that exceeded expectations, largely by doing an exemplary job in controlling expenses.
Krauth believes that Goldcorp's production could expand by 44%. In fact, Goldcorp's expense control efforts may result in a drop in cash costs in an amount equivalent to $30 – $80 per ounce – padding the bottom line for the company, and lining investors' wallets.
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GG has a 52-week stock price range of $20.54 to $32.15, and shares traded at $25.22 on May 2. In light of growth projections and expense reductions, Goldcorp is a top choice for investors seeking the best gold mining stocks.
Primero Mining Corp. (NYSE: PPP)
This precious metals producer has had operations largely focused in Mexico in years past, but recently acquired Brigus Gold. Brigus diversifies the company's production between Mexico and Canada.
Although the price per share is relatively cheap at $6.21 as of market close April 30, PPP stock has surged more than 45% since the beginning of the year. Also, the acquisition of Brigus Gold provides a substantial infusion of cash into the company's balance sheet, while opening up additional resources and capital assets.
As production has increased, Primero has successfully held costs to a minimum, resulting in an attractive income statement for prospective investors looking for the best gold mining stocks to buy.
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