The impact of gold price on the value of gold mining stock. 1995.
Blose and Shieh (1995) look at relationship between mining stocks and the price of gold. Based on 23 US gold mining stocks they find that their exposure to changes in the gold price is greater for high costs miners for the sample period (Monthly 1981-1990). Based on OLS regressions of levels data they show that total firm value is positively related to the gold price and its proven reserves, while negatively related to its costs of production. The firms’ exposure to the gold price gives an elasticity that is greater than one, so that the sum of the firms market capitalisation and debt is more volatile than the price of gold.
This follows earlier work by McDonald and Solnick (1977) who assessed whether mining stock returns are related to the gold price and show that there is a statistically significant positive relationship between the two, with a stronger relationship evident for high cost miners.
Reference: Blose, Laurence E., and Joseph CP Shieh. “The impact of gold price on the value of gold mining stock.” Review of Financial Economics 4.2 (1995): 125-139.