Sunday, December 21st4.7°C
24563
23979

Gold miners look to a difficult 2013 behind them with earnings expected

OTTAWA - Canada's big gold miners are set this week to report their quarterly and full-year earnings for a year that many will likely be happy to put behind them.

The price of gold and the shares of the companies that produce it were hammered last year.

"We expect the year-end reporting season to continue to separate the wheat from the chaff," RBC Capital Markets analysts wrote in setting up their expectations for the quarter.

"Companies that can demonstrate the potential for improved free cash flow and capital discipline are likely to benefit, while those with deteriorating balance sheets are likely to struggle to attract investor attention."

RBC expects gold miners to cut their reserves as they lower the price for gold used in their estimates. The bank said companies, a majority of which use prices of $1,300 an ounce, will likely cut that to the $1,100 to $1,300 an ounce range.

"In some circumstances, reserves could be meaningfully cut as mine lives are reduced and mine plans altered to focus on higher margin ounces," the bank said.

Kinross Gold Corp. (TSX:K) and Agnico Eagle Mines Ltd. (TSX:AEM) are expected to report results after the close of markets on Wednesday.

Kinross is expected to report a fourth-quarter profit of three cents per share, while Agnico Eagle is expected to earn 18 cents according to the average analyst estimates compiled by Thomson Reuters

They will be followed by Canadian heavyweights, Barrick Gold Corp. (TSX:ABX) and Goldcorp Inc. (TSX:G), on Thursday.

Analysts on average expect earnings of 40 cents per share and 23 cents per share per share from Barrick and Goldcorp respectively.

Barrick has pared down its portfolio in recent months with several deals to sell non-core assets.

Last month, Barrick announced a deal to sell its stake in the Kanowna Belle and Kundana mine operations in Western Australia to Northern Star Resources Ltd. for A$75 million in cash.

And last week, Barrick and Goldcorp sold the Marigold mine in Nevada that the pair jointly owned to Silver Standard Resources Inc.

Gold hit a record closing high of US$1,891 in August 2011 just before the U.S. Federal Reserve embarked on another round of quantitative easing.

It started 2013 close to the US$1,700 level as gold bulls were convinced that inflation posed a threat, but the price started to fall rapidly in early May to end the year at about US$1,200.

Prices have lately found safe haven from emerging market worries and gold stocks started out 2014 on a strong note.

Shares in Barrick which fell 40 per cent in 2013 are up about 14 per cent so far this year. Goldcorp, which fell about 35 per cent last year is up 26 per cent since the start of January.

However, CIBC suggested the wild ride for gold may not be over.

"So the gold market is on a roll again," CIBC said in a recent report.

"It may just be temporary if most commentators are to be believed and, if so, the current little trot may just be the last opportunity to sell into some strength for some time."

The Canadian Press


Read more Business News

24376


Recent Trending




Today's Market
S&P TSX14468.26+121.51
S&P CDNX676.54+11.04
DJIA17804.8026.65
Nasdaq4765.38+16.983
S&P 5002070.65+9.42
CDN Dollar0.8618+0.0001
Gold1197.20+2.50
Oil56.50+2.39
Lumber336.20-0.70
Natural Gas3.446-0.196

 
Okanagan Companies
Pacific Safety0.12-0.01
Knighthawk0.01-0.005
QHR Technologies Inc1.25-0.03
Cantex0.03-0.005
Anavex Life Sciences0.1726+0.0026
Metalex Ventures0.05-0.005
Russel Metals25.58-0.42
Copper Mountain Mining1.55-0.02
Colorado Resources0.120.00
ReliaBrand Inc0.011-0.0089
Sunrise Resources Ltd0.05-0.005
Mission Ready Services0.215-0.01

 
24130


24304

FEATURED Property
2115040Box 120
$449,000
more details
image2
Click here to feature your property
Please wait... loading


My final thoughts on real estate

This will be the last column I write on real estate. Largely because at the end of the year I will be handing in my license. After 20+ years of working in land development, resort development and rea...


Reflecting on the end of the year

The importance of the end of the year and the Christmas holidays is profound. It is a time to reconnect with family and traditions that have made us who we are. But the year-end has always been a time...


Parenthood: Estates, insurance & taxes

It is now even more important to ensure your loved ones are well looked if anything should happen to you. Here are a few topics to consider helping you prepare for some of the unexpected events that c...

_



24437

24476


Member of BC Press Council


23895