Why this ASX 200 gold stock is 'the BHP of gold mining'

The ASX 200 gold stock owns some of the top mining assets in the world.

| More on:
A man standing in a red rock mine is covered by a sheet of gold blowing in the wind.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

S&P/ASX 200 Index (ASX: XJO) gold stock Newmont Corp (ASX: NEM) only began trading on the ASX on 27 October.

The United States-based gold mining giant was previously only listed on the New York Stock Exchange (NYSE).

But following Newmont's successful acquisition of former ASX-listed gold miner Newcrest Mining, the company opted to dual list in the United States and Australia.

And having swallowed up Newcrest's assets, Newmont's market cap now stands at a whopping $76 billion.

That dwarfs the second biggest ASX 200 gold stock, Northern Star Resources Ltd (ASX: NST), which has a market cap of $16.8 billion.

Indeed, Newmont's wide range of high-quality gold mines has Blake Henricks, portfolio manager at the Firetail Australian High Conviction Fund, labelling the company the "the BHP Group Ltd (ASX: BHP) of gold mining".

Here's why Henricks is bullish on Newmont shares.

A massively overlooked ASX 200 gold stock

The Firetail Australian High Conviction Fund recently increased its holdings of Newmont shares.

That's despite, or perhaps because, the ASX 200 gold stock tumbled a painful 25% over the first two months of 2024.

"It was one of our biggest detractors over the last six months – and it's fair to say the market has put Newmont in the sin bin," Henricks said (quoted by The Australian Financial Review).

Commenting on Newmont's performance on the NYSE, Henricks added, "Gold prices are up more than 20% in the past two years, and yet Newmont is down close to 30%. That's a very large dislocation."

Indeed, the gold price has had a strong run over the past two years, with the yellow metal really taking off at the end of February.

On 28 February, gold was trading for US$2,035 per ounce. At market close yesterday, that same ounce was trading for US$2,414. That sees bullion up almost 19% in just 10 weeks.

As you'd expect, this has been a boon for most ASX 200 gold stocks, with Newmont shares surging 43.72% since market close on 28 February.

And citing the comparison to BHP's market dominance, Henricks believes there's more outperformance to come from Newmont.

According to Henricks (courtesy of the AFR):

[Newmont] is the BHP of gold mining. They own more than half of the world's tier one assets… this is the kind of business you want to buy. We believe the market's massively overlooked [this stock].

In April, the ASX 200 gold stock reiterated its FY 2024 guidance.

Newmont expects to produce 6.9 million ounces of gold over the full year at an all-in sustaining cost (AISC) of US$1,400 per ounce.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Gold

A man in a suit face palms at the downturn happening with shares today.
Gold

Guess which ASX gold stock is crashing 20% on permit blow

This gold miner is having a day to forget. But why?

Read more »

Gold bars and Australian dollar notes.
ETFs

$10,000 invested in GDX ETF a year ago is now worth…

Has this ASX gold ETF delivered for investors amid the recent gold price bonanza?

Read more »

Gold bars on top of gold coins.
Gold

Why did Citi Group just raise its gold price target?

One ASX broker thinks gold's recent run is all out of steam, at least for now.

Read more »

Woman holding gold bar and cheering.
Gold

Up 200% in 2025, guess which ASX gold stock is surging 11% again today

Investors are sending the ASX gold stock soaring again today. But why?

Read more »

Man with rocket wings which have flames coming out of them.
Gold

Guess which ASX gold stock just rocketed 167% on big news!

Investors are sending the ASX gold stock flying higher on Monday. Let’s find out why.

Read more »

Rising gold share price represented by a green arrow on piles of gold block.
Gold

Up 72% in 2025, why is this ASX 200 gold stock racing ahead of the benchmark again today?

Investors are bidding up this high-flying ASX 200 gold stock again on Thursday. But why?

Read more »

Three miners wearing hard hats and high vis vests take a break on site at a mine as the Fortescue share price drops in FY22
Gold

With the gold price near records, should I buy Evolution Mining shares today?

With Evolution Mining shares up 116% in 12 months, should I still buy the ASX gold stock today?

Read more »

A man with a wide, eager smile on his face holds up three fingers.
Gold

3 reasons this ASX 200 gold mining giant could soar higher into 2026

A leading expert forecasts more outperformance from this surging ASX 200 gold stock.

Read more »