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Strategies & Market Trends : Value Investing
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To: WIND FALL who wrote (68514)9/1/2021 4:05:28 PM
From: bruwin1 Recommendation

Recommended By
Lance Bredvold

  Read Replies (1) of 78778
 
"Buffett bought it, not sure if he still owns it"

From his latest published portfolio it seems that he no longer owns any Barrick Gold shares ....

warrenbuffettstockportfolio.com

With regard to those Gold company shares, .... back in the 1980's my stock market "mentor" wrote a book on "Investing in Gold ...".

He emphasized 4 variables to determine when choosing a company that was involved in mining and extracting Gold :-

1) Cost per Ton of Ore Milled (c)
2) Gold Content per Ton of Ore, i.e. the Ore Grade as grams/ton (g)
3) Revenue Received per Ton of Ore (r)
4) Bullion Price per gram of Gold (b)

With that information one can get a "Factor" for a Gold Producer :-

Revenue per Ton, "r" = bullion price x ore grade = b x g

Profit per Ton, "p" = revenue/ton - cost/ton = r - c

Factor for Gold Producer = (profit/ton)/(cost/ton) = p/c.

Here we have an example of 33 SA Gold Mines that he ranked back in 1987 based on that "Factor" shown in the far right column ......



It seems that if one is going to invest in a Gold Mining company, or a company that invests in Gold Mining companies, it's probably a good idea to look into who's Profit per ton is the greatest relative to their Cost per ton of ore mined.
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