7 Best Australian Gold Stocks

Australian gold stocks are favoured by stock investors seeking exposure to the precious metal after gold prices hit a new record this year. Australia, rich in natural resources, offers a number of excellent gold mining stocks traded on the Australian Securities Exchange (ASX) to benefit from any further upside.

The price of gold rose to an all-time high of US $2,531.60 per ounce on 20 August 2024, fuelled by impending interest rate cuts by the US Federal Reserve. That would put pressure on the US dollar, and further boost gold prices, which move inversely. With the average gold bar now worth more than US $1 million, and considering the complications of physical gold shipments and storage, the best way to cash in on the soaring price of gold is by investing in gold mining stocks.

To help you invest in Australia’s gold mining sector and get exposure to record high gold prices, we compiled a list of the best gold stocks available on the ASX. These seven gold mining companies are all profitable with established track records. In addition, their shares have risen the and profits have increased this year. While not all of them are based in Australia, they all trade on the ASX. Read on for our picks:

An in-depth look at these top Australian gold stocks

These seven Australian gold stocks are strong performers and are worth a look by investors interested in the sector. All of them have shown a double-digit average annualised return over the past decade:

1. Newmont Corporation CDI: 10-year average annualised return of 10.52%

Newmont is not only a top ASX gold company, but the largest gold miner in the world, having produced 5.5 million ounces of gold in 2023. It took a big leap forward when it bought out Newcrest last year for AUD $26.2 billion. Newmont says the move gives it more than half of the world’s tier-one assets with long-life operations, ample exploration prospects that add value. It anticipates the takeover will mean AUD $500 million of annual cost savings by the end of 2025. The company has been active in acquisitions as it also bought Canada’s Goldcorp for US $10 billion in 2019.

In the second quarter, net income rose 24.7% from the prior quarter to US $838 million, or $0.73 in earnings per share (EPS). The increase was driven mainly by the higher average realised prices for all metals. Earnings in the previous quarter suffered as a result of a loss of US $485 million on assets held for sale. In addition, the company was able to pay off $250 million in debt and did $250 million in share buybacks.

Newmont reduced its quarterly dividend, though, to $0.25 from $0.40 this year. However, it still delivers a yield of around 2%. The stock is up more than 48% over the past five years and more than 20% this year.

2. Northern Star Resources: 10-year average annualised return of 30.13%

Northern Star had a sluggish third quarter plagued by heavy rainfall in its mining areas. However, it’s expected to bounce back in the fourth quarter. The company’s primary mines are Jundee and Kalgoorlie in Western Australia and Pogo in Alaska, which the company bought in 2018. The gold miner says it expects to extract 2 million gold ounces annually from its operations within a few years. In addition, it has been ambitious in raising its dividend as well as in stock repurchases.

The ASX gold company is spending big to more than double the output at its Kalgoorlie operations, about 600 kilometres southeast of Perth. That includes growing the “Super Pit,” the largest open-pit gold mine in Western Australia and extending its life until 2034.

In spite of that spending, its financials have been solid. Northern Star posted first-half revenue of AUD $2.24 billion, up 15% year over year. Net profit after taxes (NPAT) also rose, jumping 287% to AUD $211 million. In its June quarterly update, the company said it delivered on its full-year 2024 goal of 1.621 million ounces of gold sold at an AISC (All-In Sustaining Cost) of AUD $1,853 per ounce, along with record net mine cash flow.

On the dividend front, the company is expected to pay AUD $0.30 in dividends per share this year. The stock yields about 2.18%. Over the past decade, it has kept its dividend safe with a payout ratio of around 47%.

3. Evolution Mining: 10-year average annualised return of 23.1%

Evolution made our list of the top Australian gold stocks, because it specialises in low-cost mining. It’s seeking to get the most out of its six mines: Cowal in New South Wales, Ernest Henry and Mt. Rawdon in Queensland, Mungari in Western Australia, Red Lake in Ontario, Canada, and Northparkes in New South Wales. 

In 2024, it extracted 716,700 ounces of gold, a 10% increase in production, at a cost of AUD $1,477 per ounce. That cost, combined with an average selling price of AUD $3,190 per ounce it, up 23% on 2023, led to record full-year profit in 2024. It also saw copper production rise by 43% to 67,862 tonnes.

Evolution reported a full-year NPAT of AUD $422.3 million, up 158% year on year. Revenue climbed by 44% to AUD $3.22 billion, while EPS rose from AUD $8.91 to AUD $22.02. That enabled it to declare a fully franked final dividend of AUD $0.05, more than double 2023’s final dividend. All in all, this was the 23rd consecutive year it delivered a dividend. The one dark cloud was that Evolution was the victim of a ransomware attack on its IT systems in August. It said, though, it had contained the incident, which should not materially impact its operations.

4. Rio Tinto: Average 10-year annualised return of 11.57%

We picked Rio Tinto as one of the best Australian gold stocks for being a consistently profitable and diverse mining company. An established mining company, it has been in business for more than 150 years. In addition, it delivers an above-average dividend that is covered with a 50% payout ratio.

In the six months ended June 30, Rio Tinto reported net profit of US $5.81 billion, up 14% year over year. Revenue was also up, rising 1% year on year to US $26.8 billion, led by increased copper sales. Sales of the red metal rose 31.8% to $2.2 billion. Revenue from gold was US $350 million, compared with US $249 million in the first six months of 2023. Earnings before interest, taxes, depreciation and amortisation (EBITDA) was up 3% to US $12.1 billion. CEO Jakob Stausholm said the company is on track to see 3% in compound annual growth from 2024 to 2028 from existing operations and projects.

The company has recently shored up a deal with the Queensland government to maintain the future of Australia’s second-largest aluminium smelter, BSL, while supporting the smelter’s adjustment to renewable energy.

The one downside was the company kept its dividend unchanged at US $1.77 per share (around AUD $2.68) per share, but the yield is impressive at around 6.9%.

5. West African Resources: 10-year average annualised return of 30.15%

West African is among the top ASX gold stocks because the company’s finances are on the rise. Its first mine, Sabrado, 110 kilometres south of Ouagadougou, is projected to produce between 210 and 230 koz of gold in 2023. Kiaka, which is 45 kilometres south of Sanbrado, is expected to start production by the third quarter of 2025. Kiaka lies 45 km to the south of Sanbrado and is expected to average 219 koz a year of gold over a mine life of nearly 19 years.

In the first half of 2024, revenue rose 12% year over year to AUD $344.4 million, while profit after tax climbed to AUD $92.2 million, up 11% from the same period last year. Earnings per share rose to $0.079 from $0.072. As impressive as those numbers are, they could easily improve further once Kiaka begins producing.

One black cloud on the horizon for the company is the possibility that Burkina Faso will cut the length of mining permits. WAR stock fell early in August when the gold miner said that Burkina Faso plans to reduce the maximum length of initial mining permits from 20 years to 10 years. The maximum term of an initial mining convention would be five years, under the proposal. However, the proposad changes wouldn’t affect Sanbrado’s permit, which was renewed for another five years in April.

West African also reiterated its 2024 gold production guidance of 190,000 to 210,000 ounces. It also left its prediction for all-in sustaining costs of less than AUD $1,991.73 per ounce unchanged.

6. Tribune Resources Ltd.: 10-year average annualised return of 10.63%

While listed on the ASX, Tribune Resources has several significant overseas projects — its wholly owned Japa gold project in Ghana’s Akropong belt, and the Diwalwal gold project northeast of Davao City in the Philippines. In addition, the company has two major joint ventures in the East Kunana Joint Venture (EKJV) tenements of Western Australia. Both East Kunana projects are underground mines – Raleigh and Rubicon-Hornest-Peagsus. It has a 36.75% stake in East Kundana, with Gilt Edge Mining, a subsidiary of Northern Star Resources, owning 51% stake of the site, with RAND Mining Ltd. owning the remaining 12.25% stake.

In the first half of fiscal 2024, it reported NPAT of AUD $11.1 million, up 137% year over year. EPS increased to AUD $21.13 from AUD $8.88 in the same period last year. Revenue was AUD $63.4 million, up 21.5% year over year. The stock has gained more than 23% this year. In June, the company said that its share of the gold produced at the EKJV operations was 6,640 gold ounces, up 6% from the same period last year.

Finally, it has a solid dividend of AUD $0.20 per year, which equates to a yield of around 5.48% and is 100% franked.

7. Perseus Mining: 10-year average annualised return of 23.01%

Perseus is a relatively new Australian gold producer that is focused on growth through acquisitions. To illustrate that, It has recently become the largest shareholder in Predictive Discovery Ltd., with a nearly 14% stake. Predictive, backed by BlackRock Inc., is developing a project in Guinea and is seeking government permits for the Bankan asset there. The latest move comes on the heels of Perseus’ takeover of OreCorp, to obtain the Nyanzaga project in Tanzania.

Apart from that, Perseus has been cost conscious. It has focused on low-cost production of gold and is in a strong position to continue to grow. On top of that, it has no debt. Over the past three years, it has averaged 513,091 ounces of gold production at AISC of US$988 per ounce, well below the AISC of other gold producers. The group’s first-half NPAT was AUD $164.7 million, up 20% year over year. Revenue was AUD $489 million, up 10% from the same period a year ago, thanks to continued strong contributions from the Edikan and Yaouré projects, and a steady contribution from Sissingué. 

The gold mining firm doesn’t report full-year results until Aug. 28, though. However, thanks to the increased selling price for gold, signs are pointing to a record year. In June, it said it had production of 120,929 ounces of gold at AISC of US $1,173 per ounce. That brings the full-year production total to nearly 510,000 ounces (down from 535,281 ounces in 2023). The star for Perseus in 2024 is its Yaouré Project, which produced 250,857 ounces of gold at AISC of US $943 per ounce.

Perseus’ dividend has a yield of around 1.11%. It raised its interim dividend by 17.9% this year to AUD $1.25.

Year-to-date performance of the best ASX gold stocks trading

What are Australian gold stocks?

Australian gold stocks are the shares of gold mining companies that trade on the ASX. The companies on our list either have their base in Australia or have significant mining operations there. They are engaged in gold exploration, mining, and production within Australia. 

Known for its vast mineral resources, Australia is a global leader in gold production. That makes it a compelling market for investors seeking exposure to this precious metal. However, investing in gold stocks involves inherent risks, including fluctuations in gold prices and operational challenges.

What makes ASX gold stocks attractive to investors?

According to a report by Market Research Future, the gold mining industry is expected to grow from US $208.2 billion in 2023 to US $272.2 billion by 2032, at a compound annual growth rate of 3.5% for the forecast period. A big driver for the rise is a growing use of gold in jewelry, particularly in Asia. This is bound to help lift ASX gold stocks as well.

Gold is one of the world’s oldest forms of money. It’s been used as a store of value since the ancient times, because, unlike most other metals, it does not rust or corrode. In addition, due to its of its durability and conductivity, it has several practical and industrial applications, including in electronics, medicine and dentistry.

Gold preserves its value, therefore, owning gold stocks is a good addition to any investment portfolio. To further diversify your investments, the ASX offers other options in the natural resources sector, including Australian lithium stocks and copper stocks.

Another appealing feature of Australian stocks, not only gold stocks, is that they offer above-average dividends. This is due to a culture of income investing and tax incentives the government offers. Therefore, the ASX lists plenty of decent dividend stocks for income focussed investors.

How to choose the right ASX gold shares to buy

Like any investment, look at a company’s financial records and reports before investing in a stock. Investing in gold minings stocks is considered riskier than some investments, so you really need to do your research. It also makes sense to invest in gold mining companies that are thriving financially, have large market capitalization to navigate economic downturns. In addition, look for ones that have a strong portfolio of performing mines.

Pros and cons of investing in Australian gold stocks 

Gold mining stocks have been surging, due to record prices for gold. The sector is known for volatility, though, so it is best to know some of the pros and cons of investing in gold mining stocks.

Some of the pros of buying Australian gold stocks

• Abundant Gold Reserves: Australia boasts significant gold reserves, making it a stable and reliable source of supply.  
• Strong Mining Industry: The country has a well-established mining industry with advanced infrastructure and expertise.
• Currency Hedging: Owning Australian gold stocks can provide a natural hedge against the Australian dollar, as gold is typically priced in US dollars.
• Diversification: Gold stocks can diversify an investment portfolio, offering a potential hedge against inflation and economic uncertainty.

Some of the risks of buying Australian gold stocks

• Gold Price changes: The price of gold can be highly volatile, directly impacting the value of gold stocks.
• Market vicissitudes: Investor sentiment towards gold and mining companies can cause significant price swings.
• Mining challenges: Gold mining is a complex and risky operation, subject to factors like geological conditions, equipment breakdowns, and labour disputes.
• Environmental Concerns: Mining companies face increasing regulatory pressures and potential costs related to environmental impacts.

Methodology: How we chose the best Australian gold stocks

With gold mining stocks being a relatively risky investment, we chose those Australian gold stocks that are showing a profit and improved financials. Finally, we also looked for ASX gold stocks that have been in business for at least a decade. It’s important to understand the sector when examining gold mining stocks and these are some of the key factors we looked at:

• Cost Structure: Lower production costs (all-in sustaining costs) provide a stronger margin when gold prices fluctuate.
• Reserve Quality and Quantity: High-grade reserves with ample quantities are essential for long-term profitability.
• Production Profile: A consistent production profile with growth potential is desirable.
• Financial Strength: A strong balance sheet with low debt levels and positive cash flow is crucial.
• Exploration Potential: Companies with promising exploration projects have growth opportunities.
• Dividend Yield: Many gold mining companies offer dividends and the ones that do are showing strong cash flow and a certain level of stability.
• Geographic Diversification: Companies with operations in multiple jurisdictions can reduce geopolitical risks.

Australian gold mining stocks FAQs