Gold mining stocks are a popular way to gain exposure to gold and the opportunity for out performance. The gold mining sector is large and liquid. Over 300 gold mining companies are listed and publicly traded on various US stock exchanges alone. Globally the sector is capitalised at over US$220 billion. Capitalisations range from between US$50 – US$300 million to the large cap gold mining stocks of over US$10 billion. Investing in gold mining stocks is a logical substitute and complement to investing in other forms of physical gold. That’s because the value of the stocks is driven significantly by the price of gold. In addition, the mines, projects, reserves of unmanned gold below ground, or mining royalty income streams also impact the stock price. Gold mining stocks do not simply track the price of gold in the same way that physical bullion, gold ETFs or gold futures do. These stocks are also a potential source of excess return or ‘alpha’ - over and above the return on gold. Numerous factors are involved in the pricing and valuation of gold equities. These can include: the maturity and geographic spread of mining projects, gold reserves, ore grades, costs, margins, profitability, strength of balance sheet, the debt profile and the quality of management. A combination of these forces will cause the share prices of gold stocks to act in a leveraged manner around the value of gold.