Gold miners are still out of favour with most investors after their disastrous performance in 2013, but as the S&P/ASX 200 (ASX: XJO) (INDEX: ^AXJO) continues to push higher and the valuations of top performing blue-chip stocks like Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC) rise, now is a smart time to consider adding exposure to this usually counter cyclical industry.
Although some smaller gold producers are notorious for being nothing more than highly volatile money pits, several of the larger listed miners demonstrate better stability and are producing positive cash-flows.
Newcrest Mining Limited (ASX: NCM) remains the ASX's largest listed gold miner and its size drives economies of scale which in March helped to establish the company as one of the lowest cost gold producers.
After a dire 2013 the company is again back in cashflow positive territory and expects to remain positive in the 2015 financial year. Gold production is also expected to be higher than FY14, with estimates of between 2.2 to 2.4 million ounces for the year compared to between 2.0 and 2.3 million in FY14.
Newcrest has an exceptional gold reserve life of around 33 years which gives it additional credibility in a long-term portfolio.
A second stand-out miner is Northern Star Resources Ltd (ASX: NST), which after a recent series of brilliantly timed acquisitions is the ASX's fifth-largest gold stock.
Northern Star has a low-cost production base and is targeting All-in Sustaining Costs of $1,050 per ounce, well below the current gold price of A$1,400 per ounce.
