When investing in gold miners, it's more likely that they will burn a hole in your account than be the next big thing. Generally, we are not too fond of companies that are correlated to the price of commodities. However, Kirkland Lake Gold Ltd. (NYSE:KL, TSX: KL) is one of the few exceptions in the industry. We believe that its proven track record of operating efficiently combined with a favorable environment for gold will act as tailwinds for the stock price.
Why Kirkland Lake Gold?
Kirkland is the most well-run mining company on the market. The issue some investors might have with mining companies is that their value is dependent on the price of the commodity they're digging for. Therefore, when gold prices hit a slump, the miners follow.
However, Kirkland seems to be an exception. Despite a stagnant gold market between 2016 and the end of 2018, Kirkland's stock price saw an increase of over 1000%.
This growth has been driven by the company's improving fundamentals. Over the years, Kirkland has reduced its all-in sustaining costs per ounce of gold while simultaneously increasing its production, therefore, minimizing the impact of the commodity price.
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