Canada derives much of its wealth from its plentiful natural resources and, as a result, has some of the largest mining companies in the world. Investors seeking exposure to the Canadian mining sector may want to consider some of the options. The following is a rundown of the five largest Canadian mining companies by market capitalization and as reported in 2020 by Northern Miner.
1. Barrick Gold Corporation
The company operates gold and copper mining operations and projects in 13 countries in North and South America, Africa, Papua New Guinea, and Saudi Arabia. Barrick produced more than 5.3 million ounces of gold in 2019. The company holds a number of large and undeveloped gold deposits. Barrick had a market cap of U.S.$47 billion as of June 2020.
In 2019, Barrick and Newmont Goldcorp established Nevada Gold Mines LLC. The company is owned 61.5% by Barrick and 38.5% by Newmont. This joint venture is one of the largest gold-producing complexes in the world, which includes three of the Top 10 Tier One gold assets.
2. Nutrien Ltd.
Nutrien (NTR) is a fertilizer company and the largest producer of potash in the world. It is also one of the largest producers of nitrogen fertilizer. Nutrien was born in 2016 through a merger between Potash Corp. and Agrium Inc., with the deal closing in 2018. The merger combined the fertilizer mines of Potash and the direct to farmer retail network of Agrium. Nutrien had a market cap of U.S.$19 billion market cap as of June 2020.
In 2019, potash made up approximately 37% of the company’s earnings before interest, taxes, amortization, and depreciation. Nitrogen contributed 29% and phosphate 5%. Nutrien posted earnings before interest, taxes, depreciation, and amortization of U.S.$4 billion on sales of U.S.$20 billion. The company reported free cash flow of U.S.$2.2 billion. Since the company’s inception at the beginning of 2018 until the end of 2019, it has allocated U.S.$5.7 billion to shareholders through dividends and share buybacks.
In early 2020, Nutrien announced that it will be purchasing Agrosema, a Brazilian Ags retailer. This is in line with Nutrien's strategy to grow its presence in the Brazilian agriculture market.
3. Agnico Eagle Mines Ltd.
Agnico Eagle Mines (AEM), founded in 1957, produces precious metals with mines in Finland, Mexico, and Canada. It also runs exploration activities in these countries as well as the United States and Sweden.
With a market cap of U.S.$15 billion, Agnico Eagle has paid out an annual dividend since 1983, making it an attractive investment choice. According to the company's website, operations exceeded production targets in 2019 for the eighth year in a row. Gold production totaled 1,782,147 ounces of gold for that year, with production costs of $735 per ounce, total cash costs of $673 per ounce, and all-in sustaining costs of $938 per ounce. In 2020, payable gold production is expected to be 1.63 to 1.73 million ounces, while total cash costs per ounce are expected to be between $740 to $790, and all-in sustaining costs are forecast between $1,025 to $1,075 per ounce of gold.
4. Kirkland Lake Gold Ltd.
Kirkland Lake Gold (KL) is a gold mining company with operations in Canada and Australia. The firm produced 974,615 ounces of gold in 2019 and has a market cap of U.S.$11 billion as of December 2020. Kirkland is a much smaller company when compared with some of its peers, but it has seen incredible growth in its mining capabilities. The companies production number for the third quarter of 2020 showed a growth of 37% year over year to 339,584 ounces in the third quarter. Consolidated gold sales rose 29.5% year over year to 331,959 ounces.
In January 2020, Kirkland completed its purchase of Detour Gold Corp. for approximately $3.7 billion. The acquisition added a large Canadian mine to Kirkland's asset holdings and allowed for exploration within the area.
Kinross Gold’s (KGC) mines in the Americas, Russia, and West Africa produced 2.5 million gold-equivalent oz. in 2019, and the company had a market cap of U.S.$9 billion as of Dec. 2020.
Fifty-six percent of its production in 2019 came from the Americas, 23% from West Africa, and 21% from Russia. Its three largest mines—Paracatu (Brazil), Kupol (Russia), and Tasiast (Mauritania)—accounted for more than 61% of the company’s annual production in 2019.
The company is working to ensure that its Tasiast, Mauritania mine will reach a throughput capacity of 24,000 tonnes per day by mid-2023. In 2020, Kinross announced its decision to proceed with the restart of La Coipa in Chile, which is expected to begin contributing to the company's production in 2022.