Gold & Precious Metals covers gold, silver and platinum-group-metal miners and the royalty and streaming companies that finance them. MoatScope covers 111 companies here. Three have a wide moat, seven a narrow moat and 100 none, making it one of the least moat-rated industries in the market.
How the industry makes money
Miners are price takers: their profit is the metal price minus the cost of getting it out of the ground, and every mine depletes, so they must keep finding or buying new deposits. Royalty and streaming companies work differently. They provide capital to miners in exchange for a share of future production or revenue, which gives them exposure to metal prices and exploration upside without the operating costs of running mines.
Where the moats are
Moats are rare, and they come from cost advantages, present in eight of the ten moat-rated companies, and efficient scale, present in six. All three wide-moat companies are royalty and streaming businesses rather than miners.
- Wheaton Precious Metals: a leading streamer with a diversified portfolio of stream agreements.
- Franco-Nevada: a royalty model that is structurally advantaged over mining, because it shares in revenue without bearing mining costs.
- Royal Gold: a royalty and streaming portfolio built on capital discipline and portfolio quality.
The narrow-moat group includes the largest low-cost miners, Newmont, Agnico Eagle, Barrick and Kinross, along with Pan American Silver, Triple Flag and OR Royalties. Most miners, including large producers such as AngloGold Ashanti, Gold Fields and Alamos Gold, carry no moat.
What wears moats down
Reserves run out, costs for energy, labor and equipment rise, and new mines take years and large sums to build. Miners also face jurisdiction risk, from tax changes to permits and security, and operating accidents. Royalty companies avoid most of these costs but depend on the miners they finance operating well.
What the quality scores say
The royalty and streaming leaders score between 65 and 79 on MoatScope's quality scale. Several narrow-moat miners also score in the mid-70s, while the industry averages 31.
What to watch
- Gold and silver prices.
- All-in sustaining costs per ounce at the major miners.
- Reserve replacement and new mine development.
- New stream and royalty deals, and the terms royalty companies can win.
Moat ratings and quality scores on this page update as companies report. Price versus fair value for every company in the industry is in the screener.