Long term performance of precious metal miners.

Poor long term performance of most precious metal miners causes the HUI index of unhedged miners and the Philadelphia Gold and Silver miners index (XAU) to lag both precious metals and the general stock market.

This has been amply demonstrated on the detailed Gold Miner Pulse page and in the articles referenced therein. The Miners Performance page provides a ranking of individual miners since 19 Nov 2010 or the introduction on the Toronto or US stock market.

Presently I went beyond this approach: For all individual miners and the precious metal mining ETF's, their performance over 2023 is shown, combined with their long term performance and a 'strength' indicator determined by where the stock price on Dec 29 is situated within the interval (max, min) of last year. Here you can find the PDF. 

Graphical outcome

High disparity of miner and explorer performance is an understatement: in the graph the present value of a $1 investment in a miner is depicted on a logarithmic scale from 0.01 to 10. This allows accommodating all but one miner (which unfortunately lost more than 99% of its initial value on 19 Nov 2010). For all quotes, reverse stock splits have of course been taken into account.  The 2023 performance is also on a log scale, but the interval is limited between 0.2 and 3.

Yearly versus long term performance of miners and mining ETF's

Mining and metal ETF's are indicated in blue. For the sake of completeness, the mining and broad stock market indices are also included in blue. You find the DJ Ind, the SP-500 and the Nasdaq Comp. in the upper right part: they combine a high long term performance with a more than decent rise over 2023. Still in the upper right quadrant, you also find GLD, the physical gold ETF. Mining ETFs and the physical silver ETF SLV are near the axis at the left hand side: in most cases there is little gain over 2023 but losses have been accumulated over the long haul.

There is a low positive correlation (0.18) between long term performance and the outcome over 2023. Mean reversion is not in the cards: it is possible but not common.

Survivor bias

The worst mining picks are not even on the chart. There have been a few bankruptcies but many more explorers or small miners delisted from the TSX and/or the TSX Venture exchange. In a few more cases, the coverage on the Gold Miner Pulse list was suspended because the market capitalization fell below a few million C$, making the stock highly illiquid. 

A few highlights

An explorer or miner that has (almost) doubled over 2023 is quite rare, despite gold having risen to a new all time high. A few GMP picks have done so, either recovering some of the hefty loss incurred or adding on to previous gains.

Quote	Name	End2023	Min	Max	Strength	LT	1Y
NGEX.V	NGEx Minerals Ltd.	7.16	2.72	7.9	86%	5.4242	2.3247
BVN	Compañía de Minas Buenaventura SAA	15.24	6.45	15.74	95%	0.2846	2.0212
AUMN.TO	Golden Minerals Company	0.68	0.14	3.4	17%	0.0275	1.8630
HMY	Harmony Gold Mining Company Ltd	6.15	2.93	6.58	88%	0.5181	1.8088

Most often, a high gain over 2023 also implies that the miner quotes near the top of its (max, min) interval. Strangely enough that is not the case for Golden Minerals Company. This long despised explorer saw its stock price flare up twice after exploration success and the sale of a rich mineral deposit. 

Despite a majority of red weekly candles, the rallies have been so powerful that the stock price is eventually up 86% over 2023. Selling into the rally may have provided a decent multiple. Over the long haul, this is still a poor investment. However it illustrates how important is a close follow-up on a speculative explorer investment.

NGEX is the non-ferro explorer left over after its copper-gold project JoséMaria resources was spun off. The latter has been acquired by Lundin Gold.

The lower right

At the lower right, you find miners or explorers with a decent long term track record, but which had a lackluster 2023 performance. You need to evaluate whether these are ideal recovery candidates or perhaps high flyers stalling and falling. Just a few names:

Quote	Name	End2023	Min	Max	Strength	LT	1Y
FIL.TO	Filo Corp.	21.11	16.42	28.11	40%	9.2996	0.9083
KNT.TO	K92 Mining Inc.	6.51	4.64	8.86	44%	5.0465	0.8488
FNV	Franco-Nevada Corp.	110.81	102.29	161.25	14%	3.3496	0.8119
OLA.TO	Orla Mining Ltd.	4.32	3.53	6.895	23%	3.3486	0.7592
OSK.TO	Osisko Mining Inc.	2.67	2.36	4.53	14%	2.5673	0.7629
SSL.TO	Sandstorm Gold Ltd.	6.66	5.9	8.45	30%	1.9304	0.9354
MAG.TO	MAG Silver Corp.	13.79	13.26	22.96	5%	1.5305	0.6520
BTG	B2Gold Corp.	3.16	2.77	4.4	24%	1.3799	0.8852

Not surprisingly the 'Strength indicator' is quite low among these picks.

Your chances of identifying a recovery candidate is better among these picks than trying to do the same among the numerous explorers and miners combining a poor long term track record to a dismal 2023 performance.