Zacks Industry Outlook Highlights: B2Gold, Primero Mining, Agnico Eagle Mines, Yamana Gold and GoldcorpZacks Industry Outlook Highlights: B2Gold, Primero Mining, Agnico Eagle Mines, Yamana Gold and Goldcorp - Press Releases

For Immediate Release

Chicago, IL – February 24, 2015 – Today, Zacks Equity Research discusses Gold, part 2, including B2Gold Corp. (BTG-Free Report), Primero Mining Corp. (PPP-Free Report), Agnico Eagle Mines Ltd. (AEM-Free Report), Yamana Gold, Inc. (AUY-Free Report) and Goldcorp Inc. (GG-Free Report).

Industry: Gold, part 2

Link: https://www.zacks.com/commentary/37982/should-you-buy-gold-mining-stocks-now

Gold has historically proven to be a very desirable metal, never losing its appeal. This precious metal’s attributes, including malleability, resistance to corrosion and tarnishing, and glitter, makes it ideal for all kind of jewelries. But there is certainly more to gold, which is also a ripe investment option. Gold investors buy gold bullion and official coins as a hedge against inflation or a safeguard against the collapse of paper assets such as stocks, bonds and other financial instruments.  

Even though gold seems to have lost its luster in recent times as an investment option, there are plenty of reasons to be optimistic about the gold mining industry for both the short and the long term. Below, we have discussed some of the key reasons and what investors in the gold mining sector can look forward to in the coming months and years:

Growth in India and China

Over the last decade, combined demand in India and China have grown 71%. In 2014, these two markets accounted for 54% of consumer gold demand, up from 33% in 2005. India has a strong tradition of investing in gold, mainly in jewelry. Demand mostly peaks around the wedding and festive season in India, which begins in mid to late August and continues until January.

Gold accounts for 30% of the total wedding expenditure in India. This increases the local currency’s demand and price during the wedding season. In China, people view gold, whether in the form of bars, coins or jewelry, as a natural vehicle for savings and diversification.

India is currently the number one consumer of gold, knocking China to second place. Jewelry demand surged to a record 662 tons in the fourth quarter of 2014 when Indians bought more gold in the run-up to Diwali and the start of the traditional wedding season. Weakening of gold prices in rupee terms last year and confidence in the new government also helped the cause of gold.

China alone accounts for about a third of global gold demand. A continuous shift toward higher margin products was observed within China’s jewelry market in 2014. Gem-set and 18-carat gold items are becoming increasingly popular, with the latter largely occupying the attention of the younger generation and appears to have further scope in 2015.

The World Gold Council expects demand from China to grow at least another 20% by 2017. Over the span of five years, China’s middle class will grow from 300 million to 500 million. India also has a comparatively low level of per capita gold holdings. The powerful combination of increasing urbanization and strong cultural affinity for gold bodes well for the metal’s demand in India and China.

Moreover, the development of Singapore as a regional hub will facilitate the flow of gold within and between these markets. With its proximity to Singapore and China, India and its neighbors are also likely to contribute to the growing importance of the Asian region as a whole.

Growing Trend in the U.S.

In 2014, jewelry demand was at 132.4 tons, the highest annual demand since 2009, exceeding its five-year average for the first time since 2003. Some promising trends emerged in the U.S last year — a continued shift from 10-carat toward 14-carat jewelry; and responsiveness among consumers to targeted marketing campaigns. Growth in consumer confidence and the slump in oil prices are likely to lead to further improvements in this market over the coming quarters. Retailers report a widespread conviction in the underlying growth trend.

Mergers & Acquisitions

The austerity in the mining sector led to more measured mergers and acquisitions (M&A) in the past couple of years. Deals came through when companies had enough cash to take over assets unloaded by peers. The acquisition of juniors, most notably of Volta Resources by B2Gold Corp. (BTG-Free Report), Brigus Gold by Primero Mining Corp. (PPP-Free Report), and the Agnico Eagle Mines Ltd. (AEM-Free Report) and Yamana Gold, Inc. (AUY-Free Report) acquisition of Osisko Mining breathed life into an otherwise dormant market.

As gold prices rebounded in the early part of 2015, a flurry of M&A activities was noted recently. One of them being Goldcorp Inc.’s (GG-Free Report) eye-catching all-stock deal valued at $526 million to buy Toronto’s Probe Mines Ltd. and scoop up one of Canada’s most promising new gold discoveries in northern Ontario. The deal will give Goldcorp control of the highly-touted Borden gold project near Chapleau, Ontario, about 160 km west of Goldcorp’s century-old Porcupine mine in Timmins.

The company discovered gold on the site in 2010 and delineated 2 million underground ounces and 2.5 million open pit ounces in less than four years. This transaction is in line with Goldcorp’s longstanding strategy of securing growth opportunities in and around its existing districts with a focus on low-cost, high-quality gold production. The Probe deal suggests that majors are on the hunt for acquisitions.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
 
Get the full Report on BTG - FREE
Get the full Report on PPP - FREE
Get the full Report on AEM - FREE
Get the full Report on AUY - FREE
Get the full Report on GG - FREE
 
Follow us on Twitter: https://twitter.com/zacksresearch
 
Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
 
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
 
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
 
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
B2GOLD CORP (BTG): Free Stock Analysis Report
 
PRIMERO MINING (PPP): Free Stock Analysis Report
 
AGNICO EAGLE (AEM): Free Stock Analysis Report
 
YAMANA GOLD INC (AUY): Free Stock Analysis Report
 
GOLDCORP INC (GG): Free Stock Analysis Report
 
To read this article on Zacks.com click here.