New Article: The Best Gold Miner Value Stock in the World? Looks Like Beacon

I went ahead and wrote an article on Beacon. In trying to create an objective gold miner valuation system, ended up with a trading system that has a 20% CAGR in last 16 years with 1 day of trading per year. https://ceo.ca/@geodan/the-best-gold-miner-value-stock-in-the-world-looks-like-beacon

The article ended with the below.

An objective way to determine the #1 best-value gold miner in the world?

To attempt this, I came up with the idea of putting all 30,000 stocks at UncleStock into a filter. The parameters were to sort on owner Earnings Yield. Owner Earnings is a cash flow concept popularized by Warren Buffett in his 1986 Berkshire Hathaway company letter to shareholders. Owner Earnings = (a) Net Income plus (b) depreciation, depletion, amortization, and other non-cash charges minus (c) average annual maintenance capital expenditures.

Next, I filtered for only stocks that were gold miners, with less than 4 Allen EV/EBITDA and a debt ratio < 2.0. I then backtested that formula for 16 years, annually refreshing stocks that fit the criteria and only using the 8 best in the OE Yield sort. This filter today only finds 59 stocks, and only about 40 are really gold miners. To my pleasant shock, the CAGR, the average gain per year over 16 years, is 20%! That trounces the SP 500. And both were about the same until 2020, when this filter took off and has beat the SP500 greatly since then. (Note for HotCopper: like 70% CAGR last 3 years, click the image it expands and is readable)

On the current list of the best gold miners with this filter, indeed, Beacon Mineral shows up as #2. #1 was Majestic, MJS.v., but it is in China. I have had problems in the past with cooked books there, so I have not bought a stock that has been in China for over 10 years. The above image is the prior-year list, not the current list. So indeed, Beacon ended up being the very best gold miner in the world in a jurisdiction with trustworthy accounting. Eastern Platinum also has superb numbers but is not gold, and it is in South Africa, mine-wise.

I am so glad I made this attempt at creating the objectively best gold miner value finder in the world. Gold miners have underperformed the SP500, but this filter leaves the SP500 in the dust.

The company comes across as very honest and careful with investors money. Here is the most recent video presentation by the Managing Director.

In conclusion, objectively, Beacon Minerals indeed does appear to be the best value among gold miners in the world. I, however, encourage people to comment if they think there is a better one.

The article is in a contest on CEO.CA (the HotCopper of Canada miners). If it wins it will get a bunch of USA and Canada mining investors interested in Beacon. You can comment on article, free login there, like here. Some buzz on article will help it win contest. It does appear Beacon is the best value, check out entire article here: https://ceo.ca/@geodan/the-best-gold-miner-value-stock-in-the-world-looks-like-beacon