Dividends and (GG) (ABX) (AU) (NEM) (AUY) (CG) Gold Miners

Gold miners like Goldcorp (NYSE-GG), Barrick Gold (NYSE-ABX), AngloGold Ashanti (NYSE-AU), Newmont Mining (NYSE-NEM), Yamana Gold (NYSE-AUY) and Centerra Gold (TSX:CG) have taken on a new practice of offering dividends to investors, attacting a more cautious, but long-term investor crowd to their folds.

As long as the underlying fundamentals remain in place, which are numerous, this should continue to be the practice of gold miners, especially for those looking for longer term investors, as well as attracting new shareholders to the stock.

Some of the fundamentals not going away any time soon are low interest rates, consequences of the policies of the Federal Reserve, sovereign debt crisis in Europe, inflation, unrest in the Middle East and the ongoing collapse of the U.S. dollar.

Obviously the income from gold miners aren't comparable to other equities, but add the growth potential to the mix and there is a lot to like about the right gold mining companies.

Goldcorp (GG), (HMY) (AU) Fall as Gold Prices Drop

Gold prices took a breather Monday after pushing up for several days, ending up with gold miners like Goldcorp (GG), Harmony Gold (NYSE:HMY) and AngloGold Ashanti (NYSE:AU) plunging in share price.

On Monday gold prices ended lower, dropping $6 to $1,468 an ounce on the Comex division of the New York Mercantile Exchange. The contract had set a new all-time in the last session, reaching $1,478 a troy ounce.

June gold settlements were $1,468.10, down $7.90; Range was $1,465.40-$1,472.80.

Much of the recent rise in gold prices is based upon the collapsing U.S. dollar, pullback in China, sovereign debt crisis in Europe, unrest in the Middle East, deepening inflation and consequences of the Japanese earthquake are just some of the negative factors hitting the markets.

A stronger dollar on Monday pressured gold prices down. The U.S. dollar battled back to gain lost ground from the euro, with the European currency trading at $1.4426, down from $1.4480 on Friday.

AngloGold Ashanti closed Monday at $49.25, falling $1.84, or 3.60 percent. Harmony Gold closed at $15.08, down $0.48, or 3.08 percent. Goldcorp closed at $53.44, dropping $1.00, or 1.84 percent.

Barrick (ABX), (AEM) (GG) (GFI) (ABGL) See Gold Cost Challenges

CEOs of Barrick Gold (NYSE:ABX), Agnico Eagle (NYSE:AEM), Goldcorp (NYSE:GG), Gold Fields (NYSE:GFI) and African Barrick Gold (ABGL) all recently said they see the rising costs of mining gold as a future challenge to the industry and their individual companies.

Even as the gold miners report stronger cash flows and good profits, costs are increasingly becoming an area of concern and some worry about the impact costs will have on capital expenditure

While the high price of silver, copper and other by-products of gold extraction have kept operating costs in check, miners are worried that capital spending on new projects will become unmanageable as labor, steel and energy costs keep pushing higher.

On top of that, gold miners have also suffered as the Canadian dollar, Australian dollar, Chilean peso and Mexican peso have strengthened against the U.S. dollar. Sales of most miners are typically denominated in U.S. dollars, while costs are often based in local "commodity" currencies.

A catch-22 for the industry is its success as well, as outlying gold deposits which couldn't be mined in the past because of prohibitive costs are now able to be mined successfully, but it does cost more to do it, but gold demand forces companies to pursue the resource.

Another problem is the delayed reaction from greedy governments, which are now attempting to extract a larger portion of the earning of the companies because of out of control spending and making promises they can't keep.

The problem there is they're making decisions based on past performance and costs rather than what the companies are now, and will be facing in future years. That could also devastate and slow the industry down if the greedy politicians attempt to take even more from the miners.

Barrick (ABX) Positioned for Long-Term Profitability

Barrick Gold is not just among the largest gold miners, but is one of the best producers in the sector as well for shareholders.

The giant gold miner has been able to successfully lower costs after a time when they struggled being a high cost gold producer. They have also risen to the challenge of replacing their reserve base while lowering those costs.

Also of note is Measured, Indicated, and Inferred Resources are growing while Proven and Probable Reserves are being replaced

The company has spun off high cost and high risk project projects while the lower cost mines were being brought online, putting the company in a strong position to produce and compete in the years ahead.

After the selloff it looks like shares of the company were oversold and the stock is probably ready to start to climb upwards again.

Barrick closed Monday at $50.32, gaining $0.92, or 1.86 percent.

Iamgold's (IAG) 2011 Inflation, Costs Pressures

Gold miners like Iamgold (NYSE:IAG), while performing solidly, have been receiving attention from investors who are concerned over how the company will respond to higher inflation and rising costs.

Even coming off of great quarters, and Iamgold itself generating 39 cents a share on revenues of $495 million, which far surpassed analysts' estimations, there is still a sense of uncertainty for the year going forward.

In the case of inflation it's somewhat surprising, as well-run gold miners tend to do well in those circumstances, with gold prices usually pushed up as a result of money flowing into the sector for safety.

Concerns over higher costs in the case of Iamgold are well-founded, as they rose by close to $100 an ounce from last year in the same quarter, to $574 an ounce.

But high gold prices can be forgiving, and it appears that should continue on into 2011, helping negate that factor, although they'll perform lower than some of their peers.

Guidance for 2011 is for cash costs to range from $565 and $595 an ounce on production of 1.1 million to 1.2 million ounces of gold.

Iamgold recently raised its dividend to 8 cents a share.

SPDR Gold Trust (NYSEArca:GLD) Gets $122 Million Jana Partners Investment

In the fourth quarter, Jana Partners said in a required regulatory filing that they invested $122 Million in SPDR Gold Trust (NYSEArca:GLD), equal to 881,844 shares.

After that investment it made SPDR Gold Trust the third-largest holding of the fund.

Another major holder of SPDR Gold Trust is John Paulson, who continues to be bullish on gold over the long term. His fund also has a major stake in NovaGold (AMEX:NG), among other gold miners.

Gold has been weak so far in 2011, but a growing number of investors and analysts expect it to break out sometime in the near future.

SPDR Gold Trust was trading at $133.04, up $0.72, or 0.54 percent, as of 1:51 PM EST.

Gammon Gold (NYSE:GRS) Releases Ocampo Drilling Update

After the completion of its exploration program at Ocampo, Gammon Gold (NYSE:GRS) released its results, which at several different sites were reported as high grade.

Peter Drobeck, the Senior Vice President of Exploration and Business Development at Gammon Gold Inc., said, “We are very encouraged by the continuing positive results from our exploration program that supports the significant upside potential at Ocampo.”

The gold miner added they've already begun their exploration drilling program at Ocampo for 2011, which includes 11 rigs working at a variety of veins at the project.

For 2010, they used 12 rigs for the exploratory program, which the sites Refugio Norte, Resurrecion and Polvorin had high mineralization.

Gammon Gold closed Monday at $8.18, up $0.01, or 0.12 percent.

Agnico-Eagle (NYSE:AEM) Downgraded by Credit Suisse (NYSE:CS)

Agnico-Eagle Mines Ltd. (NYSE:AEM) was downgraded by Credit Suisse (NYSE:CS), dropping them from "Outperform" to "Neutral."

Over the last year Agnico has burned through a lot of cash, raising concerns among a number of investors. They spent over $124 million over the last 12 months.

Agnico is trading today at $77.69, falling $0.49,or 0.63 percent at 12:15 PM EST.

Credit Suisse has a price target of $86 on the gold miner.

Barrick Gold (NYSE:ABX), Kinross Gold (NYSE:KGC), Newmont Mining (NYSE:NEM) End Wednesday in Positive Territory

Performances from diversified miners and gold miners on Wednesday were mixed, were mostly level, and miners relatively stable in their price movements, like Barrick Gold (NYSE:ABX), Kinross Gold (NYSE:KGC) and Newmont Mining (NYSE:NEM).

Most of them were much higher throughout the day, but as with others miners, they fell in the last couple of hours of the trading session, as did gold prices.

Barrick closed Wednesday at $49.17, rising by $0.32, or 0.66 percent. Kinross ended the session barely above level, ending the day at $17.44, gaining $0.02, or 0.11 percent. Newmont was at $59.59, increasing by $0.20, or 0.34 percent.

Trading volume for all of them were below their 3-month daily average.

SPDR (NYSE:GLD), Market Vectors Gold (NYSE:GDX) Draw Hedge Fund Interest

Last quarter a number of hedge funds revealed in their required 13-F filings that they invested heavily in SPDR Gold Trust (NYSE:GLD), and to a lesser extent, Market Vectors Gold Miners ETF (NYSE:GDX).

Investing in SPDR were Third Point LLC, Highfields Capital, and the hedge fund ran by Chris Shumway, a former big trader at Goldman Sachs (NYSE:GS).

Highfields also invested in Market Vectors Gold Miners ETF, buying up 200,000 shares. They acquired 1.6 million shares of SPDR. Third Point bought 115,000 shares of SPDR, and Shumway's fund, 2.1 million shares.

On the other hand, George Soros divested of some shares in SPDR, while also getting rid of entire stakes in some gold miners.

It was somewhat of a mixed bag last quarter, with the hedge funds mentioned above, with the exception of Soros' adding to their gold positions.

While others sold shares also, all of them still retained significant gold exposure in them. It seems they think they may be at the top of the short-term upward move, and are poised for a correction.

The fact that they held so many shares speaks to the fact gold isn't near the end of its bull run by any means, and have taken profits at the top of the price while probably waiting for the correction to invest in gold again.

Hecla (NYSE:HL), Pan American (NASDAQ:PAAS), Silver Wheaton (NYSE:SLW) Drop on China CPI Numbers

Hecla Mining Company (NYSE:HL), Pan American Silver Corp. (NASDAQ:PAAS) and Silver Wheaton Corp. (NYSE:SLW) all dropped in response to China's consumer index price came in at 4.4 percent, higher than was expected.

This also reeked havoc on gold prices as well, with gold miners, gold futures and spot gold prices all plummeting on Friday.

The reason the prices of gold and silver fell was in response to speculation China may rein in their economy even further and raise interest rates as the tool of choice.

While silver is unique in that it's considered an industrial and investment metal, it has both of those working in its favor at this time, but it's increasingly being thought of for its investment quality at this time, so is moving up and down more on that fact rather than industrial demand.

In other words, people are using silver similar as gold, in that they're considering it a place of safety and protection against inflation.

One factor for silver and gold companies going forward should be cost containment, as those who better manage costs, at least for long-term investors, will be those who can operate better in strong or weak economic conditions, and have flexibility of pricing and ability to grow through acquisition if they choose to. That comes from having more cash on hand to work with and not be boxed in from too much debt.

As for Hecla Mining Company, they closed Friday at $8.41, dropping $0.51, or 5.72 percent. Silver Wheat ended the week at $33.79, losing $1.60 Friday, or 4.52 percent. Pan American Silver Corp. was at $36.79, falling $$1.47, or 3.84 percent.

Yamana (NYSE:AUY), Gammon (NYSE:GRS), NovaGold (AMEX:NG) Slammed on China Interest Rates

Speculation on the possibility of China raising their interest rates had gold traders and speculators jittery today, and spot gold prices plunged by over $40 an ounce, bringing with them gold miners like Yamana (NYSE:AUY), Gammon Gold Inc. (NYSE:GRS) and NovaGold Resources.

While gold investors are probably happy about the price of gold plummeting like it has, as they've been waiting for another entry point to invest in gold, traders and speculators are fleeing their long positions in gold in order to cover margin calls in other investment sectors.

This has all come about from the revelation that the consumer price index of China came in higher than expected, driving the rumors the middle kingdom may be ready to increase their interest rates to combat the inflationary forces.

The volatility of the price of gold is driven by traders and not investors, and that's why it's considered a good thing by investors as they see it as a potential great opportunity, although most will surely wait to see if there is in fact a much larger correction coming.

Yamana was trading at $11.68, losing $0.37, or 3.07 percent at 1:15 PM EST. Gammon Gold was at $6.55, dropping $6.55, or 3.65 percent. NovaGold was trading at $14.47, falling $0.58, or 3.85 percent.

Barrick (NYSE:ABX), Goldcorp (NYSE:GG), Newmont (NYSE:NEM) Push Up As Gold Breaks $1,400

Major gold miners Barrick Gold (NYSE:ABX), Goldcorp (NYSE:GG) and Newmont Mining (NYSE:NEM) are all pushing up today, led by Barrick, which soared over 3 percent as gold prices soared past $1,400 an ounce.

The gold news going forward will largely be the effects of quantitative easing on the price of gold, as well as the U.S. dollar, which usually move inversely to one another.

Ben Bernanke instituted another round of inflating by announcing he will inject another $600 billion into the economy over the next 8 months, and if that doesn't work, he's poised to go even further if he has to, as he doesn't know how to do anything else.

Gold investors will benefit from this, and those gold miners who have positioned themselves as regular companies should outperform the others. In other words, those that are offering dividends and helping investors to better understand their businesses should do well.

The other major factor is gold miners who have lowered their costs of doing business through managing operations, and having solid ancillary metal revenue which offset the cost of mining for gold per ounce.

Barrick was trading at $50.74, gaining $1.53, or 3.11 percent as of 2:19 PM EST. Goldcorp rose to $47.47, up $1.24, or 2.68 percent. Newmont was at $62.51, increasing $0.89, or 1.44 percent.

With these three major gold miners considered safer bets, they will benefit strongly in the sector, although a number of smaller miners are ready to soar, especially those that have been out of favor from past guidance and haven't moved up with gold prices.

Kinross (NYSE:KGC), AngloGold Ashanti (NYSE:AU), Harmony (NYSE:HMY) Explode Upward on Rising Gold Prices

Kinross Gold Corp (NYSE:KGC), AngloGold Ashanti (NYSE:AU), Harmony Gold Mining (NYSE:HMY) are moving up in a major way in response to the explosion in gold prices and the overall response of the broader gold market.

All of this is the result of the misguided move by the Federal Reserve to inflate, or as they like to describe it now: implement a new round of "quantitative easing."

Consequently the U.S. dollar plummeted in value as expected while the price of gold rose, also as expected.

Kinross moved up to $18.64, gaining $0.83, or 4.66 percent at 1:56 PM EDT. AngloGold Ashanti Ltd. traded at $48.95, rising by $2.36, or 5.07 percent. Harmony Gold soared to $12.24, increasing by $0.83, or 7.27 percent.

Almost every gold miner, or mining company with significant exposure to gold have risen today.

Eldorado (NYSE:EGO), Agnico (NYSE:AEM), Kinross (NYSE:KGC) Plunge as Gold Prices Today Fall

Kinross Gold Corporation (NYSE:KGC), Eldorado Gold (NYSE:EGO) and Agnico-Eagle (NYSE:AEM) plunged along with the broader gold market, as mixed economic data and the strength of the U.S. dollar pushed gold prices today down.

Even though expectations the global and US economy is slowing down and a new round of quantitative easing is just around the corner, that didn't keep the dollar down today or the price of gold up, as gold continues to temporarily correct. It should be considered a buying opportunity at this time.

For Kinross, Agnico and Eldorado, they're among the largest gold miner losers today, with their share prices falling more than most.

Agnico is the strongest of these three gold miners mentioned, dropping to $69.85, losing $1.82 or 2.54 percent as of 12:59 PM EDT.

Eldorado has fallen to $16.46 a share, losing $0.71, or 4.14 percent.

Kinross was at $17.02, falling $0.63, or 3.57 percent as of 1:01 PM EDT.

Yamana (NYSE:AUY) Still Struggles to Gain Respect, Traction

Although there have been a lot of positive comments and data presented on the future of Yamana Gold (NYSE:AUY), it continues to struggle to gain respect and traction in a gold investment climate that should result in a much better price movement for the gold miner.

Scotia interrupted the attempted party again, downgrading Yamana from "Sector Outperform" to "Sector Perform."

With analysts having eight "strong buy" ratings, six "buys," and four holds" on Yamana, we will probably see more downgrades for them in the near future.

Most people continue to hold out hope that Yamana will take off, and yet it continues to linger, even though it does seem to have a number of reasons to be a solid investment and outperformer.

Their extremely low production costs alone make it a desirable company, coming in at a little over $100 a gold-equivalent ounce.

That gives them a lot of flexibility and enables them to operate in weak and strong markets when competitors would flounder.

Yamana also has significant metal resources like zinc, copper, molybdenum and silver, all of which are positioned to move up nicely in price, especially copper and silver.

From last year at this same time, Yamana has generated a loss for its share price, closing Monday at $11.17, losing $0.10, or 0.89 percent.

Citigroup (NYSE:C), Macquarie Acquiring OceanaGold (TSE:OGC), Shares, Warrants

In an effort to raise $152 million, OceanaGold (TSE:OGC), which is NZX-listed, is offering a private placement, with Citigroup Global Markets Canada (NYSE:C) and Macquarie Capital Markets Canada underwriting the placement, agreeing to acquire special warrants and common shares in OceanaGold for C$3.50 each.

The purpose is to fund its gold and copper mine in the Philippines, while also expanding its gold mines in New Zealand.

A trading halt has been placed on OceanaGold, which is listed on, along with the New Zealand exchange, on the Australian and Toronto exchanges as well.

Other funding is being considered for its Didipio project in the Philippines, as this funding is targeted for the Reefton and Macraes gold mines.

The offering has a closing date of October 20.

Allied Nevada (NYSE:ANV) Sells 5,000 Shares of Company

The president and CEO of Allied Nevada Gold Corp. (NYSE:ANV), Scott Andrew, sold 5,00 shares he held in the company for an average price of $26.21. He sold the shares on September 15, 2010.

Interestingly, institutional investors have been plowing investment into the gold miner, increasing the amount of shares owned from 69,878,861 shares to 83,606,659 shares over the last three months. That's just under a 20 percent increase.

Altogether, institutions now own over 94 percent of the company.

Institutional investors in Allied Gold include Chuck Royce of Royce & Associates, Steven Cohen of SAC Capital Advisors, and George Soros of Soros Fund Management LLC.

AngloGold (NYSE:AU) Closing Hedge Book in Early 2011

AngloGold Ashanti (NYSE:AU) is poised to shut down its hedge book in the early part of 2011, joining other gold miners whose confidence in the support underlying gold prices will continue on for some time into the future.

The giant gold miner will offer convertible notes and common shares as the choices to raise the capital to eliminate their hedging position.

The offering of mandatory convertible notes and equities will be launched at the same time.

Approximately 16 million new ordinary shares will be issued by AngloGold, along with mandatory convertible subordinated bonds, which will be due 2013.

About $1.4 billion will be raised from the sales, which will be used not only to close Anglo's hedge book, but also to fund projects and maintain their balance sheet.

Major competitor Barrick Gold (NYSE:ABX) closed their hedge book about a year ago.

Eldorado (NYSE:EGO), Yamana (NYSE:AUY) Novagold (AMEX:NG) Soar on Record Gold Prices

It'll take time to see if the relatively benign economic news concerning the weakness of the European Union is the ultimate catalyst is leveraging gold prices to expected levels, along with the somewhat lagging gold mining stocks like Eldorado Gold Corp Ltd (NYSE:EGO) Yamana Gold, Inc. (NYSE:AUY) and Novagold Resources Inc (AMEX:NG), which soared as gold prices once again surpassed record levels.

Gold miners have responded to soaring gold prices as a mixed bag, which in some cases is justified by the unknown or lack of performance, but in many cases, based on the fundamentals, such as in the case of Yamana Gold, seem to not be able to catch the gold price wave, and has lagged behind some competitors with much less reserves and quality management.

When talking about "benign" economic news, I mean by that that other recent news should have devastated the markets and pushed gold prices and miners higher, like the revelation the stress tests for European banks were pathetic, and the banks were much more exposed to sovereign debt than revealed.

So the idea that Europe isn't as strong economically as thought, is rather weak in comparison to the recent stress test revelation.

I think this is why the price of gold skyrocketed Tuesday, because there is a pent-up realization that the economy and its condition has been covered over by rigged reports and focus on the positive only by the mainstream media, which can't seem to report honestly unless their man Obama and the Democrats are made to look bad.

No matter, the truth is slowly coming out to the general population as to the devastate U.S. economy, and even with reports generated to make it appear confusing and mixed, that is slowly dissipating into an understanding of the danger we're still in, and gold is waiting there for investors to put their money into to protect themselves.

The idea of throwing out more stimulus is a surety now, or at least the attempt to do if, and if that happens, gold will again get a big upward bump as investors seek to protect themselves against a debased currency and out-of-control spending.

Gold miners will take part in the response to this scenario as it continues to play out, and they have, in many cases, a lot of room to run before things level out.