Equity Analyst Kristoffer Inton of Morningstar says that Eldorado Gold Corp (USA) (EGO) is the lowest-cost gold miner in his coverage universe, and the only gold miner he covers that has a sustainable competitive advantage.
“At Morningstar, we assign companies moat ratings based on our assessment of their long-term competitive advantages. We assign Eldorado a narrow moat rating, because we believe the company can maintain its low-cost advantage for at least 10 years given their portfolio of low-cost and long-life mines,” Inton said.
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Eldorado has a unique strategy to build its portfolio of low-cost mines, Inton says, in that the company pursues mining assets in less popular jurisdictions, avoiding the high prices and bidding wars of the more popular areas.
“Eldorado does face some risk having to work with countries that aren’t as familiar with the gold mining industry. However, Eldorado’s management team has shown a strong track record over the years of working with these countries and opening mines as planned. This success is what leads to assign Eldorado’s management an exemplary stewardship rating, the only exemplary stewardship rating in our gold coverage universe,” Inton said.
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