Gold Breaks Above $2,000: 5 Gold Mining Value Stocks With Highest Upside Potential In 2023

Zinger Key Points
  • Gold topped $2,000/oz on Thursday, and gold miners outperformed other industries.
  • These 5 gold mining stocks currently screen the highest upside potential and cheapest valuation.

Gold prices continued to push higher on Thursday's session, breaking the $2,000/oz psychological barrier and delivering widespread gains across mining stocks. 

Investors flocked en masse to gold following the U.S. banking crisis and amid growing speculation about the end of the Fed hiking cycle.

The SPDR Gold Trust GLD, an ETF backed by physical gold, has seen more than $1.3 billion flowing in over the past two weeks. Goldman Sachs has revised their target price for gold, which is now expected to rise to $2,050/oz over the next 12 months.

Finding The Gems In The Gold Mining Sector...

Following the precious metal's move higher, gold mining companies are now experiencing bullish conditions.

We chose five stocks from the VanEck Vectors Gold Miners ETF GDX, the gold mining industry's most representative exchange traded fund, that have the biggest upside potential according to analysts' target projections and the lowest future price-to-earnings (P/E) ratio.

5 Gold Miners With Cheap Valuations and Most Profit Potential

Chart: Koyfin

West African Resources Limited (OTC: WFRSF)

  • West African Resources Limited is an Australian company that engages in the mining, mineral processing, acquisition, exploration, and project development of gold projects in West Africa. 
  • The average analyst's target price for the stock is $1.11, which is 74% higher than its current price of $0.62. 
  • WFRSF shows a single-digit P/E forward ratio of 9.4x.

Silver Lake Resources Limited (OTC: SVLKF)

  • Headquartered in South Perth, Australia, Silver Lake Resources Limited engages in the exploration, mine development, mine operation, and sale of gold and copper concentrates in Australia and Canada.
  • Silver Lake Resource's profits have risen at a compound annual rate of 35% over the past 5 years.
  • The stock shows 50% target upside potential relative to its current price, and it has a 1-year forward P/E ratio of 11.6x.

B2Gold Corp. (AMEX: BTG)

  • Headquartered in Vancouver, Canada, B2Gold operates as a gold producer with three operating mines in Mali, the Philippines, and Namibia.
  • BTG current stock price screens a 45% upside relative to analysts' average target, and a 1-year forward P/E ratio of 12.

SilverCrest Metals Inc. (AMEX: SILV)

  • SilverCrest Metals Inc. engages in the exploration and development of precious metal properties in Mexico and is headquartered in Vancouver, Canada. 
  • Over the past five years, SILV's net income has risen at an annual compound growth rate of 54%. 
  • The current share price ($6.75) has a 45% potential upside relative to the average target price from Wall Street's analysts. SilverCrest Metals currently has a forward P/E ratio of 10.1x. 

DRDGOLD Limited DRD

  • Headquartered in Johannesburg, DRDGOLD Limited is a gold mining company that engages in the surface gold tailings retreatment business in South Africa.
  • DRD is a subsidiary of Sibanye Stillwater Limited SBSW
  • DRD's net profits have risen at an annual compound growth rate of 74% in the past five years.
  • The current share price of $9.05 as of March 23 close, screens a 72% of upside with respect to average analysts' estimates. 
  • DRD has a forward P/E ratio of 13.3x.

Read next: Gold Rallies Eyeing $2,000/oz As Recession Looms – These 3 ETFs To Gain From Precious Metal's Bull Wave

Photo: Shutterstock

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