Does the Price of Gold Make Goldcorp Inc. (USA) (GG) a Bargain?

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The reason to stay away from gold miners right now is obvious, even though the price of gold is collapsing. The cost of gold mining is not; Goldcorp itself admits that production costs at its Los Filos mine in Mexico were $535 an ounce in the second quarter of 2013. Costs at the Musslewhite mine in Canada were $819 an ounce in the same period.

If history repeats itself and the great gold price collapse continues, we might hit a point where the price of gold is lower than production costs. If that happens, I don’t see how companies like Goldcorp could make any money.

Unless the current trends in the gold market reverse themselves, Goldcorp is no bargain. Instead, its stock may soon start falling faster than gold prices.

Daniel Jennings has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article Does the Price of Gold Make Goldcorp a Bargain? originally appeared on Fool.com.

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