I nvestors including the hedge fund founded by billionaire John Paulson say “significantly mismanaged” gold companies could unlock $13-billion in value through mergers and cost cuts.

The Shareholders’ Gold Council (SGC ) of 18 investors, including Egyptian billionaire Naguib Sawiris’s La Mancha, found that the median spending of senior gold producers is double that of mining companies that produce other metals, including Vale, the world’s largest iron-ore producer.

“The inescapable conclusion of our analysis is that gold producers are significantly mismanaged from a general and administration (G&A) perspective and that gold company boards need to do a better job holding management teams to account,” the council said. The potential to create more value is highest among midtier miners, which were found to be “most inefficient” in managing costs.

The investors are looking to boost shareholder value in gold mining companies to capture the benefits from the precious metal’s meteoric rise to a six-year high. In the past three years, the VanEck Vectors Gold Miners exchange-traded fund has risen less than 5%, trailing the 13% rally in bullion.

About $2.5-billion of the combined profits of 47 gold companies the council tracked were spent on salaries and costs of head office management and boards, amounting to more than 10% of their aggregate market value.

The potential for cuts is greater among so-called midtier gold producers, the report said. Their G&A spending amounts to almost 13% of their earnings, according to the median of 23 miners reviewed in the report.

The SGC urged the midtier companies to pursue no-premium mergers to cut duplicate corporate structures and achieve economies of scale. If the number of midtier companies were reduced by half, the council estimated that $2.4-billion to $3.2-billion in value could potentially be unlocked.

Of the 12 senior gold producers it cited, Polymetal International and Kinross Gold Corp had the highest spending – 17.5% and 11% of their earnings before interest, taxes, depreciation and amortisation respectively, the council said. In the case of midtier companies, the biggest expenditure was posted by Golden Star Resources at 33%, it said.

“Kinross regularly undertakes cost reviews and, earlier this year, we streamlined our leadership structure, which the simple analysis fails to take into account,” a Kinross spokesman said in an emailed statement. “It is also worth highlighting that it is not an apples-to-apples comparison, as the report’s simple analysis notes itself that different companies calculate G&A differently.”

A spokesperson for Polymetal said the miner did not immediately have enough information to be able to comment. Golden Star did not immediately respond to an email.

“Gold mining is simpler than other types of mining, including because of the fact that gold doré bars can be transported at very low costs by plane,” the council said. “Copper and iron-ore producers have complex selling arrangements for different concentrates and blends, [and] heavy trucking and rail need to deliver final products in bulk size, necessitating higher G&A expenses.”