Silver Wheaton Corp. (NYSE:SLW) (TSE:SLW) had record earnings for the second quarter, but it wasn't enough to meet analysts' expectations.
Earnings were led by an increase in production and higher silver prices, which generated $53.3 million, or 15 cents a share. That was in contrast to last year in the same quarter where they earning $18.4 million, or 7 cents a share.
Analysts had been looking for earnings of 16 cents a share for the quarter.
Revenue more than doubled from $41.4 million last year in the same period to $95.0 million this year. Analysts had expected $94.28 million in revenue.
Silver Wheaton chief executive officer Peter Barnes, said, "In the face of continued global economic uncertainty, the price of silver performed very well in the quarter, leading to record cash operating margins of US$14.45 per ounce, and clearly demonstrating the advantages of Silver Wheaton's business model of low fixed operating costs."
Concerning guidance, Barnes reiterated, "With Goldcorp's Penasquito mine in Mexico, the first of our cornerstone assets, continuing to ramp up silver production ahead of schedule, we look forward to an even stronger second half to the year and maintain our annual attributable silver equivalent production guidance of 23.5 million ounces."
Silver Wheaton closed in New York at $19.20, losing $0.67, or 3.37 percent.
Wednesday, August 11, 2010
Silver Wheaton Corp. (NYSE:SLW) (TSE:SLW) had record earnings for the second quarter, but it wasn't enough to meet analysts' expectations.
Great Basin Gold (TSE:GBG) (Amex:GBG) reported earnings today, and while still suffering a earnings loss, was able to improve to a C$5 million loss in the second quarter, compared with a C$14 million loss in the same quarter last year.
Revenue also increased, rising to C$38 million, up from C$22 million in the second quarter of 2009.
After a long period of time, the permanent grid power connection to its Burnstone mine in South Africa is now in place, and according to chief executive officer Ferdi Dippenaar, should allow the mine to start generating revenue for the company in the next couple of months.
“It is clear that the situation has already improved on site...gone are the days of power outages and the subsequent impact on production and infrastructure development,” said Dippenaar to analysts.
Production estimates at the Burnstone mine are for 254,000 ounces of gold to be produced annually as a low cash cost of $319 an ounce.
Great Basin is still in the middle of its regulatory process at its Hollister gold mine in Nevada for approval to launch commercial operations.
IAMGOLD (NYSE:IAG) has followed the path of a number of gold miners this quarter, falling in earnings even though gold prices had soared during the quarter, pointing to higher costs.
Net earnings came in at $35.7 million, or $0.10 a share, down from the same quarter last year, when they earned $44.1 million, or $0.12 a share.
Adjusted net earnings reached $39.1 million, or $0.11 a share, a gain of 24 percent over last year when they had adjusted net earnings of $31.5 million, or $0.09 a share.
Most of the drop in earnings came from closing its Doyon mine in December 2009. Other major factors were the lower quality of ore grade at Yatela, Rosebel, Sadiola and Mupane, which lowered production but raised costs.
Gold production for the quarter was 190,000 attributable ounces at an average cash cost of $623 an ounce. That was down 24 percent from last year.
Guidance for gold production was raised from 940,000 to 1,000,000 ounces at a cash cost between $490 and $510 an ounce to a range from 980,000 and 1,010,000 ounces at a cash cost between $530 and $550 an ounce.
Niobium production estimates were also increased to a range of 4.5 million to 4.7 million kilograms.
Revenue for the quarter dropped to $214 million, a 5 percent decline from last year as gold sales fell.
IAMGOLD closed at $17.32 in New York, dropping $0.57, or 3.19 percent.
Anglo American (LON:AAL), Kinross Gold (NYSE:KGC) and AngloGold Ashanti (NYSE:AU) All Drop As Gold Prices Fall
Gold miners have been taking a hit today, especially right before noon, when traders tend to make their moves, and gold prices along with it. Anglo American (LON:AAL) (AAUKF:PK), Kinross Gold Corp (TSE:K) (NYSE:KGC) and AngloGold Ashanti (NYSE:AU) all dropped in unison with gold prices during that time.
Anglo American was down to 2,358.00 in London, shedding $115.50, or 4.67 percent, as of 11:35 AM EDT. In New York there were no trades, and it stands at $38.90 in the pink sheets.
AngloGold Ashanti fell to $42.61, a loss of $0.53, or 1.23 percent, as of
12:44 PM EDT.
Kinross Gold (NYSE:KGC) lost $0.51 to drop to $15.16, a loss of 3.25 percent at 12:46 PM EDT.
After a quick start today, spot gold prices started to fall a little before 11:00 AM, an are now at $1,193.50, a loss of $10.50.
Tuesday, August 10, 2010
Ivanhoe Australia, whose biggest stakeholder is Ivanhoe Mines (NYSE:IVN), will via an institutional placement raise $211 million for acquisitions and expansion.
The particular acquisition they're looking at is the Osborne gold project, and the development side is the Merlin molybdenum project. Part of the capital will also be used to pay down some of the debt Ivanhoe Australia owes to Ivanhoe Mines.
After the completion of the deal, Ivanhoe Mine's stake in the company will decrease to 65 percent.
Chief executive Peter Reeve said, “The equity raising will facilitate Ivanhoe Australia’s development plan, including first production of molybdenum and rhenium ore from Little Wizard in 2011, and Merlin during 2012.”
Ivanhoe Australia is buying Osborne from Barrick Gold (NYSE:ABX) for close to A$18 million and the Merlin development in Queensland for A$55 million.
Current shareholders of Ivanhoe Australia will be able to acquire new shares in the company for A$2.88 via a one-for-four offer. That is a 10 percent discount from the closing price on August 9.
An interesting story is emerging as gold miners release their earnings. This quarter there seems to be the haves and have nots, and the have nots, like Jaguar Mining (NYSE:JAG), who recorded a loss in the latest quarter, are going to get punished by investors because of the high expectations accompanying record high gold prices.
The thinking seems to be if a gold miner can't make it at these gold prices, when will they make it. Those who fail will have to answer that question in order to be taken seriously.
With Jaguar Mining, they lost $5.9 million in their latest quarter, after generating a profit last year in the same period, where they earned $9.7 million, or 12 cents a share.
Revenue did experience a 12.5 percent increase, coming in at $36.9 million, up from last year's $32.8 million.
Rather than being a positive though, it highlights the inability to control costs. Having 12.5 percent more revenue and far less earnings points to major problems.
The reason for the increase in operating costs was "a significant decrease in run-of-mine grades, primarily caused by abnormally high dilution," according to the company.
That just means they didn't find as much gold in the ore as they thought they would, and it cost more to extract it, and also added to decreased gold production.
Jaguar isn't the only gold miner to experience this, as Northgate Minerals (AMEX:NXG) (TSE:NGX) had a very similar experience, with increased operational costs the major factor, with lower production the result as well.
Lower grades mean lower production, which means higher costs.
Gold miners will have to work on lowering operational costs in these types of situations if they want to thrive, or even survive. Again, if a company can't succeed in record gold price environment, when will a company succeed?
The number for cost per ounce of gold soared to $746 an ounce for Jaguar, surging from $447 an ounce last year. Production consequently fell to 30,586 ounces.
As investors absorb the data and results, they're pummeling the company, which in New York has plunged to $6.26 a share, losing $1.84, or 22.72 percent, as of 3:23 PM EDT.
You know a gold miner is in trouble when they can't produce in the type of rising gold price environment we've been in, and that doesn't bode well for Northgate Minerals (AMEX:NXG) (TSE:NGX), which did just that in the latest quarter.
Higher gold prices couldn't overcome the production problems at two of the company's mines, or the rising costs associated with them.
Their Kemess mine in British Columbia, Canada and the Stawell mine in Australia fell in production during the quarter, causing gold sales to plummet 34 percent to 65,943 ounces.
Earnings plunged from $5.4 million, or 2 cents a share last year, to $4.3 million, or 1 cent a share in the latest quarter
Not including an unrealized gain, the company loast $7.1 million, or 2 cents a share. Last year Northgate had a profit of $10.1 million, or 4 cents a share excluding items.
Revenue in the quarter also dropped, falling to $122.7 million, a decline of 5.8 percent.
The real story for the latest quarter for Northgate was its inability to manage costs, which skyrocketed to $693 an ounce, an almost 50 percent gain over last year.
This is the primary reason why they couldn't grow in about as good as a gold price environment a gold mining company could ask for.
Higher gold prices continue to be the story for most gold miners during the earnings reporting season, and Gammon Gold (NYSE:GRS) (TSE:GAM) also had earnings increases from higher gold prices, and from higher production as well.
Earnings from the quarter rose to $11.4 million, or 8 cents a share, an increase over the $3.4 million, or 3 cents a share last year in the same period.
Revenue for the quarter increased from $57 million, a gain of 32 percent. That was driven by the average price of silver and gold for the quarter.
Gold price averaged $1,201 an ounce, while silver had an average price of $18.47 an ounce.
Gold production in the quarter increased to 52,506 gold equivalent ounces, in contrast to 50,814 ounces in the same quarter last year.
The company did take a big hit from the suspension of their El Cubo mine in Mexico, taking a net loss of $180.3 million, or $1.30 a share on that.
Monday, August 9, 2010
It's no secret Ivanhoe (NYSE:IVN) is looking for even more financing for its Oyu Tolgoi mine in Mongolia, and Ivanhoe Chairman Robert Friedland has been seen a lot in the news lately letting people know about the incredible project they have in Oyu.
He's been making some interesting comments a la Richard Branson to get the Ivanhoe brand stuck in the minds of potential investors.
Even though he was joking, and in reality probably marketing, Friedland made a comment which made the Oyu Tolgoi mine look like it was valued at trillions of dollars, rather than the approximate $16 billion it is known to be worth.
He also mentioned copper outperforming gold recently, citing the dubious claim that 20 years from now cars are going to be electric, and those cars will need copper for the batteries. That was the hook though, the reality is copper will continue to be in high demand over the next 20 years, and that will have nothing to do with electric cars.
Friedland of course knows this, but he is doing the stir the imagination thing in order to have people associate that with Ivanhoe.
But as far as copper outperforming gold, that would have be on enormous volume, as gold prices will shoot up as soon as the U.S. government or Federal Reserve start do their quantitative easing thing, or printing of money. Rumors are they're moving closer and closer to that in light of the economy stalling and elections coming soon.
Seeing that hasn't worked in the past, and we've never left the recession, unless you think the government throwing money into the economy is a real recovery.
That's why there haven't been any jobs created, the private sector is for the most part doing little or no hiring, and then we hear the news reports of the "unexpected" this and "unexpected" that, when talking about economic news that didn't meat expectations.
For Ivanhoe, once production begins at Oyu Tolgoi, you'll see their stock price shoot up even more, as much of this is in anticipation of the money generating real revenue and profits, and not just potential. They're already up over double the last twelve months, and I think Friedland is trying to create interest in order to land the needed partners to forge ahead and work the extraordinary mine.
Goldcorp (NYSE:GG) declared its eight monthly dividend for 2010, the latest being $0.015 a share.
For the last seven years Goldcorp has paid a dividend to its shareholders.
Shareholders of record as of August 19, 2010 will qualify to receive the dividend payment on August 27, 2010.
Residents from Canada are allowed an gross-up and dividend tax credit on the dividend.
Goldcorp closed in New York today at $40.24, losing $0.24, or 0.59 percent.
In a recent interview which focused on being in the early stages of an inflationary depression, Peter Schiff also responded to a question on how high he felt gold prices were going to go.
His take is he's shocked that it's still at only $1,200 an ounce, and sees no limit to the upside potential in the current economic climate.
Schiff said in responding to how high he felt gold would go:
"There's no limit to how high gold prices will go. They will rise many times from here --thousands and thousands of dollars per ounce higher. People will be shocked.
"It's surprising to me that gold is still as cheap as it is. I just know it's going higher, and eventually it's going to go ballistic."
Other places to look to put your money in Schiff's view are precious metals, commodities and emerging markets. He advises no one to have their money in U.S. Dollar assets like bonds and Treasuries.
Jefferies & Co. said today they recommend investors to add to their positions in Barrick Gold (NYSE:ABX), as they said they don't see gold and silver prices dropping anytime soon.
The price target on gold remains $1,300, while the silver prices target continues at $20 an ounce.
Jefferies said in a note to clients, "We highlight metal company participation at next week's Industrials and Aerospace & Defense Conference as we reaffirm our 2010 gold price target of $1,300 and silver price target of $20 per ounce. As the dollar-based commodities reassert traditional relative dynamics versus the US dollar, we expect prices and metal equities to trade higher heading into the fall. We would continue to add to positions in our recommended names - ABX, AEM, CDE, HL and NEM."
Barrick traded down slightly today, falling to $43.31, a loss of $0.08, or 0.18 percent as of 3:36 PM EDT.
Allied Nevada Gold (TSX:ANV) (AMEX:ANV) turned things around in the second quarter over last year, generate net income of $20.8 million, far better than the $6.9 million loss they suffered last year in the same quarter.
Production for gold and silver at their Hycroft mine soared in contrast to 2009 as well, with gold production reaching 31,400 ounces and silver growing to 62,000 ounces. Last year only 14,500 ounces were produced at the mine and 15,400 of silver.
During the quarter 29,560 ounces of gold were sold and 63,859 ounces of silver, both records for the company, at a cost of $408 an ounce gold
"I am proud to report that we have achieved a number of milestones and new operating and financial records in the first half of 2010. Hycroft is running well and we have begun the first stage of the oxide expansion ahead of schedule. Exploration drilling continues to define what management believes to be a very large system and ongoing metallurgical testing continues to provide confidence for both oxide and sulfide mineralization," said Scott Caldwell, President and CEO of Allied Nevada.
Allied said it is still on schedule to meet its guidance of gold sales of about 100,000 ounces, sold in a range of $400-$500.
Friday, August 6, 2010
News outlets reporting on the "disappointing" and "unexpected" results of the U.S. payroll data, somehow find themselves using those words every time the economic data confirms the frailty of the U.S. economy, which when you remove the government props, at best show they've only slowed down the economic crisis, and at worst, and most probable, exasperated it.
Now we're almost surely going to enter into a period of more quantitative easing, which is just another way of saying the Federal Reserve is going to resume it endless printing of money.
Peter Schiff concurs, saying in a report, “It is now widely accepted that the continued domestic weakness will cause the Fed to significantly expand stimulus efforts through so-called quantitative easing. It’s a strong signal for traders to flee the dollar.”
Now that the historical inverse relationship between gold and the U.S. dollar seems to have returned, after a period of time it moved off that to a euro/gold inverse relationship, we should see gold start to rise again as the reality of the weak American economy again sinks into the minds of investors.
Gold is already responding, as it has ended in positive territory for the eight trading day in a row, moving up to $1,205.30 for December delivery on the Comex division of the New York Mercantile Exchange. That was for the most actively traded contract.
It's incredible to hear the mainstream media outlets focus on the release of census workers, which they attempt to paint as a temporary situation. Unfortunately they, in general, weren't near as aggressive in saying that when the census workers were hired and propped up the jobs market as if was on a solid foundation months ago.
There is nothing really new in these numbers, other than confirming what any discerning person already knew, and that is the private sector hasn't been hiring, and the hiring by the government for needless jobs (even without the census workers included), have created the illusion of at least a level situation. That fallacy has been destroyed with the removal of the government props and we see the American economy naked as it actually is.
I don't believe there has ever been an economic recovery in the United States, only the selling out of the future of our children and grandchildren as the Obama administration and the Federal Reserve attempt to print and spend money in order to buy time until a real recovery begins.
Unfortunately, their Keynesian strategy is backfiring, and future generations will have to pay for the outrageous stimulus programs which have done absolutely nothing to help the economy, but rather are only extending the recession longer.
Not only that, but now an increased tax burden has been added to the problem for the American people, and that should cause an even deeper rebellion and resentment from those Americans, who are increasingly discovering what these actions are doing to their country.
As far as how this affects the relationship between gold and the euro, that has started to revert to the former relationship of moving in tandem with one another, although there is little reason for that to happen, as nothing has really happened to change the sovereign debt crisis in Europe, other than the media's decision to report the crisis is relatively over.
The market is acting like there has been a real change, so while they believe it, the euro/gold relationship looks like it'll act like it has in the past.
If and when that changes, all bets are off as to how high gold prices will go, as there is really nothing in the way any longer to keep it down.
Those with discernment understand the enormous economic challenges ahead, and will invest or hold their money accordingly. Gold will remain one of the best places for safety and returns for some time to come.
The recent announcement by China they're looking for strong mining and gold mining companies to invest in has brought attention to a number of mining firms, with one of them being Seabridge Gold (AMEX:SA), which is sitting on enormous reserves via their Kerr-Sulphurets-Mitchell project, with the need of an estimated $3.4 billion to develop the resource.
With their attention elsewhere, gold mining giants Barrick Gold (NYSE:ABX) and Newmont Mining (NYSE:NEM) aren't showing any love to Seabridge, opening the door for investment from elsewhere, which should definitely be China, at least in part.
China is interested in investing in larger deposits, especially gold, so that narrows the companies they would obviously target to invest in.
To show the attraction of Seabridge's KSM project, it holds an estimated 30 million ounces of gold, 133 million ounces of silver, 7 billion pounds of copper, and 210 million pounds of molybdenum. What's not to like about it?
There are few resources like that available at this stage of development in the world, so it would be assumed they're in the running for Chinese investment sometime in the near future.
Few financial outlets would be willing to take a chance on this type of project, and even fewer companies have the resources to invest in them.
Will Teck Resources (NYSE:TCK), Seabridge Gold (AMEX:SA), NovaGold (AMEX:NG) Be Beneficiaries of China's Targeting Precious Metals and Gold?
Flush with capital, China has been eyeing mining properties and companies around the world for some time to invest in preparation for meeting their needs long into the future.
They recently have increased their scrutiny and commitment, noting the lack of capital available because of weakened credit markets.
Consequently, the central bank of China has instructed their banks to offer credit to Chinese companies attempting to make acquisitions around the world, as well as directly to non-Chinese companies producing gold and silver.
This could strongly benefit companies like Teck Resources (NYSE:TCK), Seabridge Gold (AMEX:SA) and NovaGold (AMEX:NG), who are sitting on large gold deposits, as those are the types of companies China is targeting to invest in.
Some have been castigating John Paulson for his investment in NovaGold, but in light of the direction China is taking, he's probably going to get the last laugh here, although it'll take a little time for it to take hold. This assumes China investing in NovaGold in some way, but the assets of NovaGold fit into the strategy of China perfectly. So the assumption is a healthy one.
China has already invested in Teck Resources, which has joint ventures with NovaGold, and are surely eyeing ways they can increase their stake in both companies.
For Seabridge, it's their Kerr-Sulphurets-Mitchell project which would be appealing to China, or anyone else interested in the sector that has the capital to invest.
There are of course many other possibilities, but the huge resources mentioned above are surely on the radar of China, and have a high probability of receiving the attention of the middle kingdom, along with a significant investment.
New Gold (AMEX:NGD) turned things around for the second quarter of 2009, where they has a net loss of $199.3 million, or $0.77 a share. This quarter they generated net earnings of $17.4 million, or $0.04 a share.
Included in the net earnings in the latest results was a pre-tax gain of $5.5 million in relationship to foreign exchange translation.
Revenue for the quarter was $112.4 million, almost double the $59.2 million last year in the same quarter.
Increases in revenue were attributed to the rising gold sales from the Mesquite mine, along with higher gold prices, which increased from $926 last year to $1,147 in the second quarter this year.
Gold sales for the quarter soared by 56 percent to 82,402 ounces, in comparison to 2009's 52,890 ounces.
Gold production increased t 89,919 ounces, an increase of 62 percent, up from 55,633 ounces last year.
Thursday, August 5, 2010
No matter how hard Randgold (Nasdaq:GOLD) Chief Executive Officer Mark Bristow tried to deflect attention away from the 39 percent increase in costs, he couldn't do it, and the gold miner took a beating, even though other numbers were decent in their last quarter.
The cost issue came from power outages at their Loulo mine in Mali. That resulted in the cost increases, and in dollars it came to $665 an ounce of gold. Gold price for immediate delivery for the quarter were at $1,196.53 an ounce.
Consequently, gold production in the next quarter had to be downwardly revised, and will come in at best, about 5 percent within the target range of 477,000 ounces.
Bristow said about the Mali situation, “We’re at a point where we have identified the issue. By the fourth quarter we should be settled.”
Net income rose from the $14.9 million last year in the same period, to $34.4 million in the second quarter this year.
Randgold dropped to $86.96, a decline of $3.54, or 3.91 percent.
The CEO of Gold Fields (NYSE:GFI), Nick Holland, said in an interview that the company isn't going to rely on gold prices to "bail us out." Holland added that the company is actually going to budget a lower price than the spot price is today.
This isn't to say he believes gold prices are going to fall, but that the company needs to focus on streamlining their operations, and that's going to be the focus over the next year, said Holland.
Holland added the gold price will move where it moves, and that's outside the control of the company, he wants to focus on what the company can control, and he's going to do that by putting all aspects of the business processes under review.
The goal is to improve the profitability of the cash flow for each ounce of gold that comes out of the ground.
Holland's goal is to widen margins, which this year were 15 percent. He wants to bring that to 20 percent no matter what price gold ends up at.
I think this is what gold mining companies around the world should be doing, as some miners had much larger revenues but dropped the ball on costs and margins, which lowered earnings.
Agnico-Eagle (NYSE:AEM), Colossus Minerals (TSE:CSI), Tanzanian Royalty Exploration (AMEX:TRE) Mixed as Gold Struggles for Positive Territory
Spot gold prices have moved in and out of positive territory today, generating a mixed bag of results for miners, including Agnico-Eagle (NYSE:AEM), Colossus Minerals (TSE:CSI) and Tanzanian Royalty Exploration (AMEX:TRE).
Of the three, Colossus Minerals is the only one in negative territory, dropping to $6.73, a fall of $0.25, or 3.58 percent, as of 2:00 PM EDT. Volume was heading to its 3-month average of 396,847.
Agnico-Eagle on the other hand, has enjoyed a gain today, rising to $58.76, gaining $0.19, or 0.32 percent at 2:17 PM EDT. Volume was at about half the 3-month average of 2,644,410.
Tanzanian Royalty Exploration is also positive territory at 2:19 PM EDT, increasing to $5.29, a gain of $0.07, or 1.34 percent.
If gold hangs on, it'll be the seventh day in a row it finishes higher.
As gold prices today struggle to finish in positive territory for the seventh trading session in a row, the up and down movement in the gold price, along with it remaining somewhat level has brought mixed results to gold miners like Ventana Gold (TSE:VEN), Barrick Gold (NYSE:ABX) (TSE:ABX) and US Gold (TSE:UXG)(AMEX:UXG).
Spot gold was at $1,197.50, a gain of $1.90 at about 2:00 PM EDT.
Barrick Gold hit $42.72, gaining $0.11, or 0.26 percent, at 1:58 PM EDT. Barrick has been moving up daily along with the price of gold over the last week. Trading volume is far below the 10,795,200 3-month average, standing at 3,344,683.
The smaller gold miners haven't fared as well today, with US Gold down to $5.08, a loss of $0.01, or 0.20 percent, as of 2:01 PM EDT. Trading volume was also below 3-month averages of 1,464,270, lagging at 441,176.
Ventana was down to $8.25, falling $0.05, or 0.60 percent. Trading volume was down from the 3-month average of 779,345, to 322,620.
As you can see, gold miners are moving somewhat in tandem with gold prices today, with most companies slightly up or down on either side.
Alamos Gold (TSE:AGI) earnings dropped about 7 percent on lower production in the quarter, missing analysts' estimates.
Earnings in the second quarter reached $12.1 million, or 10 cents a share, down from $13 million, or 12 cents a share last year in the same quarter.
Analysts had expected on average for Alamos to earn 12 cents a share, excluding one-time charges.
As expected, revenue increased 13 percent, coming in at $47.5 million. The higher revenue was from gold prices rising 30 percent in the quarter.
Alamos had to have had a margin and cost problem, as the higher gold prices should have pushed their earnings up, even with the lower production, which was primarily the result of delays and drought at their flagship Mulatos mine in Mexico.
Going forward, Alamos kept its full-year production estimates of 160,000 ounces to 175,000 ounces, saying production should increase in the second half.
The Board of Directors of Kinross Gold (NYSE:KGC) (TSE:K) declared a dividend of 5 cents a share, the same dividend the gold miner has paid since September, 2009.
The semi-annual dividend, is payable on September 30 to shareholders of record at the close of business on August 31.
Joining other gold miners looking to expand their investor base by increasing dividends, Kinross last raised the dividend in September 2009 from 4 cents to 5 cents, where it remains after this declaration.
Kinross recently made a friendly offer to acquire the rest of Red Back Mining (TSE:RBI) they don't own, costing about $7 billion for the remainder of the company.
Kinross Gold's (NYSE:KGC) (TSE:K) earnings were up over 33 percent, driven by higher gold prices, even as production was down and costs increased. Nothing helps margins better than higher prices.
Earnings increased to $113.1 million, or 16 cent a share, growing from $84.3 million, or 12 cents a share last year in the same quarter.
Revenue climbed to $696.6 million, a 16.5 percent gain. The average gold price in the second quarter increased from $915 an ounce to 1,158 an ounce.
Sales costs for a gold-equivalent ounce rose to $496, a 14 percent increase.
Kinross CEO Tye Burt said the company should reach their goal of 2.2 million gold-equivalent ounces in 2010.
Yamana Gold Inc. (NYSE:AUY) (TSE:YRI) failed to meet earnings and revenue expectations, generating $90.8 million in earnings, or $0.12 a share. Adjusted earnings came in at $85.8 million, or $0.12 a share.
Revenue increased from $236.71 million last year, to $351.27 million this year.
For earnings consensus was for $0.15 a share, while revenue consensus was $405.54 million
Yamana's chairman and chief executive officer, Peter Marrone, said, "We continue to focus on our production goals. We remained focused on operations this quarter, although we also focused on our development stage projects which we continued to progress. We have a robust portfolio of development stage projects with considerable value that we are advancing and an exploration program which has already begun to deliver strong results. As a result, 2010 is a year in which we expect to demonstrate growth in production, resources, cash flow and value."
The Board of Directors of Yamana also declared an increase in their dividend, increasing it to $0.08 a share on an annualized basis, or $0.02 a share each quarter. That's 33 percent sequentially and 100 year over year.
The dividend will be payable October 14, 2010, to holders of record at the close of business on Thursday, September 30, 2010.
A growing number of gold miners have focused more on dividends as a way of attracting new investors, wanting to be perceived as operating as any other business would.
Wednesday, August 4, 2010
Gold prices shot up quickly today, reaching over $1,202 an ounce, before pulling back slightly. Now gold prices have given up a little more, although they're still holding over $10 on the day.
Aurizon Mines (TSE:ARZ)(AMEX:AZK) and Minefinders (TSE:MFL)(AMEX:MFN), along with a number of gold miners and miners in general, have moved up with the gold prices.
If they gold holds for the day, which it looks like it will, it'll be the sixth straight day it closes with a gain.
Aurizon Mines was at $5.08 a share as of 1:50 PM EDT, gaining $0.03, or 0.59 percent. Volume was a little below the 3-month average of 557,618.
Minefinders climbed to $8.79 a share, increasing $0.19, or 2.21 percent. Volume was below its 3-month average of 539,265.
Seabridge Gold (AMEX:SA), Northgate Minerals (AMEX:NXG), Jaguar Mining (NYSE:JAG) Strong on Gold Prices Surging
Seabridge Gold (TSE:SEA)(AMEX:SA), Northgate Minerals (TSE:NGX)(AMEX:NXG),
Jaguar Mining (TSE:JAG)(NYSE:JAG) are all moving up with the price of gold today, as are most gold mining stocks, as a slow but steady positive move continues for gold, which has been in positive territory for the sixth day in a row.
Northgate has flirted around $3.00 a share today, although it's standing at $2.99 at about 1:00 PM EDT. They've gain $0.03, or 1.01 percent. Volume is moving at a rate below its 3-month average for the day.
Seabridge has surged to $25.95, gaining $0.68, or 2.69 percent. Volume is moving at a pace a little under the 3-month average at this time.
Jaguar Mining stands at $8.14 a share, increasing $0.26, or 3.30 percent. Volume on the day is far below the 3-month average.
Detour Gold, (TSE:DGC), Golden Star Resources (TSE:GSC), Lake Shore Gold (TSE:LSG) Surge on Higher Gold Prices
Gold prices have been surging today, about on average about $14 an ounce, and hovering around the $1,200 an ounce mark. As of about 12:30 PM EDT, Detour Gold, (TSE:DGC), Golden Star Resources (AMEX:GSS) (TSE:GSC) and Lake Shore Gold (TSE:LSG) were all participating in that upward move, all up over 3 percent in Toronto at that time. Golden Star was also up over 3 percent on the AMEX.
In Toronto, Golden Star was at $4.39, a gain of $0.14, or 3.29 percent. Volume was far below its 3-month average.
Detour Gold hit $26.59, gaining $0.89, or 3.46 percent. Volume for them was on course to reach close to their 3-month average of 556,056.
Lake Shore Gold stood at $3.23, an increase of $0.10, or 3.19 percent.
Gold, if it remains on track today, will enjoy its sixth straight trading day where it is in positive territory.
Gold prices today continue to slowly crawl back up, as it has been incrementally increasing in price for six days in a row, although did make a nice move today.
Spot gold surged to over $1,202.50 an ounce before fall back under $1,200. That tends to happen around 12:00 PM EDT as a pattern, so we'll see if it continues down or breaks back up in the latter half of the trading session.
The price of spot gold brings it to it highest level since July 23.
What seems to be important during the typically slow gold season of summer, is gold hasn't really pulled back that much, implying there is support and could be ready to surge over the last five months of the year, where most estimates are for it to reach about $1,300 an ounce.
Tuesday, August 3, 2010
Gold and other metal prices have continue to rise in general, with gold enjoying its fifth straight positive trading day, although prices are creeping up, rather than skyrocketing. Eldorado Gold Corporation (NYSE:EGO) (TSE:ELD) and Fronteer Gold (AMEX:FRG) rose over 3 percent as investor confidence and bargain hunters return to the yellow metal.
Fronteer Gold Inc. ended the day at $6.07, an increase of $0.23, or 3.94 percent.
Eldorado Gold Corporation was just behind them when measured by percentages, closing the session at $16.49, a gain of $0.56, or 3.52 percent.
If gold prices can continue to increase incrementally, or even find support and remain pretty much level, once gold prices start to surge again, it could easily soar to record levels, and a number of gold miners will follow in their wake.
Centerra (TSE:CG), Alamos (TSE:AGI), and IAMGOLD (NYSE:IAG) Up with Gold Price, Newmont (NYSE:NEM) Down
Continuing its incremental climb up, gold prices continue to rise today, ready to be in the positive for the fifth straight trading day. Centerra Gold (TSE:CG), Alamos Gold (TSE:AGI), and IAMGOLD Corporation (NYSE:IAG) all moved up, while gold major Newmont Mining (NYSE:NEM) was slightly down or around level throughout the day.
Of these four gold miners, IAMGOLD Corporation has been the best performer of the day, reaching $16.08, a gain of $0.50, or 3.21 percent at 3:44 PM EDT.
Centerra Gold wasn't far behind IAMGOLD, coming in at $13.33, a gain of $0.36, or 2.78 percent. Centerra was back in the black in the last quarter, returning to a profit.
Alamos Gold rose to $15.55, gaining $0.08, or 0.52 percent.
Newmont was down to $55.49, falling $0.11, 0.20 percent at 3:49 PM EDT. That seems to be because investors are looking for smaller gold miners at this time, although the majors have been doing pretty well lately.
NovaGold Resources Inc. (AMEX:NG), Royal Gold (TSE:RGL) (Nasdaq:RGLD) and
Allied Nevada Gold (AMEX:ANV) all moved up today, along with a number of gold miners, as gold prices are poised to finish higher for the fifth straight trading day, even though the increase has been incremental.
Novagold Resources was up to $6.26, gaining $0.10, or 1.62 percent, as of 3:17 PM EDT.
Royal Gold moved up to $45.05, an increase of $0.83, or 1.88 percent, also at 3:19 PM EDT.
Of these three gold stocks, Allied Nevada Gold enjoyed the biggest move, rising to $18.27 at 3:22 PM EDT, a gain of $0.89, or 5.12 percent.
Spot gold prices have moved up to $1,187.80 an ounce, increasing by $5.80 at just before 3:30 PM EDT.
The list of companies in the running to acquire Lihir Gold (Nasdaq:LIHR) in Australia is shrinking, as mining giant Barrick Gold (NYSE:ABX) let it be known they're no longer interested in the gold miner.
It seems Newcrest Mining (ASX:NCM) is emerging as the sole company of interest, with a bid of $A9.7 billion.
There has been speculation in the past of Newmont Mining (NYSE:NEM) being a suitor of Lihir, but for now they've elected to make no comment on what they consider speculation.
Lihir had created an online marketplace for companies interested, looking to generate an enlarged interest in the company in order to increase the bidding price. So far that hasn't worked, although if there is any other interest, it will have to reveal itself sometime soon.
With gold prices continuing to be down from their historic highs, even though they've risen slightly for four days in a row, investors are reentering the gold market looking for bargains, and the news China will expand their gold market brought them out in force today.
Both spot gold and gold for December delivery were up today, with gold for December delivery rising to $1,189.8 an ounce Comex division of the New York Mercantile Exchange.
At 12:38 PM EDT, spot gold hit $1,187.10, a gain of $5.10 an ounce.
The euro continues to rally today even as the U.S. dollar falls.
Kinross Gold Corporation (TSX:K)(NYSE:KGC) announced late Monday that they'll be acquiring the rest of the common shares they don't already own in Red Back Mining Inc. (TSX:RBI).
On a fully diluted basis, the deal is valued at $7.1 billion.
Shareholders in Red Back, per terms of the deal, will receive 1.778 Kinross common shares, plus 0.110 of a Kinross common share purchase warrant for each Red Back common share held.
After the deal is completely, shareholders in Kinross will hold about 63 percent of the newly-merged company, while Red Back shareholders will own close to 37 percent.
The combined gold production estimates for the new company by 2015 will be an estimated 3.9 million ounces, according to analysts' estimates. Kinross has stated they think those estimates could be far below the potential assets coming with Red Back.
In 2010, pro forma gold production is expected to reach 2.6 million to 2.7 million gold equivalent ounces.
After the deal the company will have a total of 10 mines and 4 development projects, with operations in 8 countries.
Proven and Probable mineral reserves in the merged company will surge to 53.2 million ounces, while Measured and Indicated mineral resources will increase to 19.5 million ounces.
Kinross CEO Tye Burt and Red Back CEO Richard Clark said this in a press release:
"This is a transformational opportunity," said Burt. "By combining Kinross' world-class mines, growth projects and proven ability in mine development with the potential of Red Back's assets, we are creating a gold growth powerhouse. The significant upside in reserves that we believe exists at Red Back, and Kinross' ability to accelerate that potential, makes this an outstanding prospect for shareholders of both companies."
"Kinross' record of successful project development and delivery together with the world class prospects of Tasiast is an exciting and unique combination," added Clark. "The growing underground production profile at Chirano and Red Back's prospective exploration portfolio fits neatly with the impressive asset base of Kinross. Red Back shareholders will benefit by participating in a large and well-diversified major gold producer with a core stable of high quality producing assets, significant expansion opportunities and an exciting exploration portfolio."
Monday, August 2, 2010
Metals miners enjoyed a great day today, as a number of precious metals rose on an increased positive outlook by investors, even though many pointers are out there showing there's a lot of risk.
Even today's confirmation China is continuing to cool off their economy was pretty much shrugged off by investors, so you know emotion is ruling the market at this time. After all, if investors aren't concerned over China slowing down, they're looking in the wrong place.
News that Europe was allegedly improving in a non-story. That's the narrative the mainstream media is carrying now, and that probably won't change, even though the region remains under extraordinary stress.
For smaller miners like Alexco Resource (AMEX:AXU) and Mines Management (AMEX:MGN) though, they can move up nicely in investing environments like this, and did, with both of them moving up in conjunction with metals prices.
Alexco traded at $3.19 at the end of the day, gaining $0.11, or 3.57 percent. Trading volume was less than half the 3-month average, pointing to large caps being on the radar of traders at this time. Even so, those holding shares in the company enjoyed a nice move.
Mines Management (AMEX:MGN) made an even bigger move, as measured by percentages, ending the trading session at $1.62, a gain of $0.07, or 4.52 percent. Trading volume was also down for Mines Management as it was for Alexco.
As long as emotion and not facts rule the market, companies like these could move up nicely, although we know they can also come down just as fast when the other side of the picture is focused on.
The question is how long with the optimism remain and commodity prices continue to rise.
In line with gold prices today, most gold miners were flat, although diversified miners like Freeport-McMoRan (NYSE:FCX) soared as metal prices in a number of categories surged upwards.
Freeport ended the trading session at $74.80, a nice move of $3.25, or 4.56 percent. Trading volume was down from its three-month average, standing at 13,021,691, down from the average of 16,038,500.
A number of metals rising in price today was behind the move of the share price of Freeport.
Although some gold miners were able to escape the relatively flat gold price today, although it did manage to rise to the fourth straight day. Most of that has been incremental and not big moves, suggesting caution in the midst of unjustified equity euphoria.
Goldcorp (NYSE:GG)(TSE:G) and Yamana Gold (NYSE:AUY) were among those who remained level, and in their case were down slightly at the end of the day.
Goldcorp finished the day at $39.06, falling $0.8, or 0.20 percent.
Yamana Gold dropped $0.05, or 0.53 percent, ending the day at $9.37 a share. Volume for Yamana was close to half of what it normally is, reflecting investors' migration to equities for now.
We like to follow gold miners here at Everything Gold to see how they move in relationship to gold price movements, which aren't always in unison with one another.
On Comex division of the New York Mercantile Exchange, gold for October delivery settled at $1,185.40, a gain of $1.50 an ounce. Spot gold increased a modest $0.86 to $1.181.84.
Let's look at Ivanhoe Mines Ltd. (NYSE:IVN), Brigus Gold (AMEX:AGT) and Gammon Gold (NYSE:GRS) to see how they fared today.
Brigus Gold, the result of the recent merger of Apollo Gold (AMEX:AGT) and Linear, remained the same today, as the tiny exploration company had no news to make it move. Brigus closed at $0.31 with no change.
Gammon Gold (NYSE:GRS), who will release their second-quarter report on August 10, got hit harder today, dropping $0.15, or 2.52 percent. Some of their competitors like Northgate Minerals (AMEX:NXG), have more proven or probable gold reserves, making them more desirable at this time.
Ivanhoe Mines Ltd. (NYSE:IVN), among my favorite gold miners and miners in general for the long term, based on their portfolio of projects, led by the incredible Oyu Tolgoi mine based in Mongolia, which will ultimately place them in the elite of mining companies when production is in full swing.
Ivanhoe closed at $18.4 Monday, up $0.28, or 1.58 percent.
Kinross (NYSE:KGC), Yamana (NYSE:AUY), Gold Fields (NYSE:GFI), Randgold (Nasdaq:GOLD), Reporting Earnings This Week
We continue earnings season this week, and a number of gold miners and other mining companies are ready to report this week. Here's a list of some of the major companies reporting this week.
Red Back Mining (TSE:RBI) - Reporting Before Market Opens
TOR Minerals International Inc (Nasdaq:TORM) - After Market Closes
Kinross Gold (NYSE:KGC) - After Market Close
Alpha Natural Resources (NYSE:ANR) - Before Market Opens
Natural Resources Partners LP (NYSE:NRP) - After Market Closes
Yamana Gold, Inc. (NYSE:AUY) - After Market Closes
ALAMOS GOLD INC. (TSE:AGI) - Before Market Opens
Canadian Natural Resources (NYSE:CNQ) - Before Market Opens
Gold Fields Ltd. (NYSE:GFI) - 2 A.M.
Randgold Resources Limited (Nasdaq:GOLD) - 2 A.M.
Rio Tinto (NYSE:RTP) - 4:30 A.M.
Allied Nevada Gold Corp (AMEX:ANV) - Not Available
DENISON MINES CORP.(TSE:DML) - Not Available
NEW GOLD INC.(AMEX:NGD) - Not Available
Silver Standard Resources, Inc (Nasdaq:SSRI) - Before Market Opens
PNM Resources, Inc. (NYSE:PNM) - 8:30 A.M.
The market has been teetering back in forth for gold over the last month, and investors have been shrugging off the underlying fundamentals underlying the reasons gold has been moving up in price for years.
AngloGold Ashanti (NYSE:AU) has followed the price movements of gold over the last week, like the majority of their counterparts, moving in tandem with the yellow metal.
The gold miner finished the week in New York at $40.52, growing $0.94, or 2.37 percent. Volume reached 2,267,099, a little above its 3-month average.
Gold prices will resume their upward run, it's a question of whether they'll continue to fall in August before that happens.
Even with the positive economic spin in the mainstream media, gold has found decent support, although it is down to its lowest levels since the early part of the year.
Barrick Gold (NYSE:ABX), Gold Fields (NYSE:GFI) and Harmony Gold Mining (NYSE:HMY) moved relatively in tandem with gold prices this week, starting the week stronger, plunging in the middle of the week, and moving up nicely over the last couple of day.
Gold Fields performed the best of the three companies, not plunging in the early part of the week as deeply as Barrick and Harmony did.
Barrick ended the trading session at $41.10, gaining $0.56, or 1.38 percent. Volume was at 6,751,159, below the 3-month average.
Gold Fields finished the week at $13.53, gaining $0.48, or 3.68 percent. Trading volume came in at 3,151,810, also below their 3-month average.
Harmony Gold reached $10.00 Friday, increasing by $0.26, or 2.67 percent. volume was at 1,403,797, far below the 3-month average of 3,244,800.
Gold prices were up the last three trading days.
Gold prices have been up for the last three trading sessions, helping gold miners recover some from an otherwise slow week and month.
Underlying fundamentals remain the same, and gold prices are expected to resume their upward run, although it may take until sometime in August before that happens, as the typical summer doldrums are still here, and investors have been ignoring the economic signs pointing to ongoing difficulties.
Kinross Gold Corporation (NYSE:KGC)(TSE:K) on their part, moved up with gold prices over the last three days, ending the week at $16.39, gaining $0.22, or 1.36 percent.
The gold mining company will provide their earnings report on August 4.