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2 Gold Mining Stocks Flashed a "Buy" Signal with Earnings This Week

These numbers are exactly what we were looking for...


Gold mining stocks have benefitted from gold prices' 6.24% rise in 2014 – with some rising as much as 13 times the gain in physical gold.

Consider Osisko Mining Corp.'s (TSE: OSK) 83.44% year-to-date gain, Primero Mining Corp.'s (NYSE: PPP) 69.14% rise, Agnico Eagle Mines Ltd.'s (NYSE: AEM) 45.75% gain, B2Gold Corp.'s (TSE: BTO) 34.86% gain, or Goldcorp Inc.'s (NYSE: GG) 29.4% uptick.

But we knew gold mining stocks were poised to deliver eye-popping returns. Miners, after gold's 28% price drop in 2013, went through a strict round of cost cutting in order to increase profitability.

"The past couple of years have seen considerable pressure on most gold equities, thanks in large part to a declining, then consolidating, gold price," Money Morning Resource Specialist Peter Krauth said in April. "That became a major challenge to gold miners as they've tried to grow production despite falling gold grades."

Gold mining companies took to costs with a machete and slashed wherever possible, to weather the storm for an extended rout in prices.

"Gold mining companies had to downsize staff, axe projects, and even rationalize selling non-core assets," Krauth told his Real Assets and Returns readers on July 7. "As a result, now they are much leaner, and will be much more profitable when commodities prices rise again."

While many gold mining stocks faltered in the past few years, those companies that managed to strengthen operations during the down gold market were poised to capitalize on gold prices' rise in 2014.

Even with a strong return so far in 2014, the gains for some gold mining stocks are just beginning…

And this week, Krauth had his eye on two gold mining stocks that were due to release earnings: Franco-Nevada Corp. (NYSE: FNV) and Royal Gold Inc. USA (Nasdaq: RGLD).

"I am curious to see how these stocks perform, as they are some of the least risky in the mining space, they have lots of cash, and both are well-positioned to benefit from the weakness of the last three years," Krauth said before the results. "Both could advance even if gold is stagnant, due to their growth profiles."

Here's how they did – and why both are "Buys" for investors in gold mining stocks …

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