|Bid||11.16 x 29200|
|Ask||11.46 x 2200|
|Day's Range||11.28 - 11.62|
|52 Week Range||11.28 - 15.55|
|PE Ratio (TTM)||17.73|
|Forward Dividend & Yield||0.08 (0.58%)|
|1y Target Est||17.40|
Gold stocks have fallen nearly 19% from their highs in 2018 as measured by the VanEck Vectors Gold Miners ETF ( GDX), which holds 49 stocks. The individual mining stocks have fallen even more than the ETF in some cases and, based on technical analysis, are facing even steeper declines. Gold miners’ revenue is tied to the price of gold, and should prices fall, revenue drops, causing earnings to decline.
In the senior gold miner space, Newmont Mining (NEM) has the highest forward EV-to-EBITDA (earnings before interest, tax, depreciation, and amortization) multiple of 8.1x. Goldcorp (GG) follows it with a multiple of 6.8x. While the premiums of all the gold miners have waned relative to their historical averages due to weaker precious metal prices, GG’s production growth has remained muted for the last two years, and its costs have trended higher.
At the end of Q2 2018, Goldcorp’s net debt and adjusted net debt totaled $2.4 billion and $2.3 billion, respectively. Thus, the net debt to EBITDA (earnings before interest, tax, depreciation, and amortization) for the company was closer to 1.7x during the second quarter. Now it’s focusing on the deleveraging and strengthening its balance sheet further to prepare the company for the next phase of the capital investment cycle, which is expected to start after 2020 with the buildup of the next generation of mines.
Goldcorp (GG) achieved AISC (all-in sustaining costs) of $850.00 per ounce in Q2 2018, which was 6.3% higher YoY (year-over-year) and 5.0% higher sequentially. Its AISC was also higher than its fiscal 2018 guidance of $800.00 per ounce, plus or minus 5.0%.
Goldcorp (GG) has one of the strongest project pipelines in the industry. Goldcorp provided an update on the progress of these projects in its Q2 2018 earnings call. At Penasquito, the Pyrite Leach Project (or PLP) is 98.0% complete.
Iamgold’s Q2 2018 Results Were a Mixed Bag: Is Outlook Better? After achieving record production of 109,000 ounces in the first quarter of 2018, Iamgold’s (IAG) Essakane mine reported weaker production in the second quarter. IAG maintained its guidance for Essakane to produce 380,000–395,000 ounces of gold in 2018.
Iamgold’s (IAG) Rosebel mine is located in northeastern Suriname in South America. IAG owns 95% of Rosebel. In the second quarter, Rosebel’s attributable production fell 5% YoY (year-over-year) to 70,000 ounces. Lower production at the mine was mainly due to planned maintenance and an increase in hard rock blend.
Iamgold (IAG) generated revenues of $277.4 million in Q2 2018, which represents a YoY (year-over-year) growth of 1.1%. Its higher realized prices and higher sales at its Rosebel mine were offset by lower sales volumes at its Essakane and Westwood mines. Its attributable gold production was 214,000 ounces, which was 4% lower than Q2 2017.
The CFTC (Commodity Futures Trading Commission) reports the position of major players in the futures market through its COT (Commitment of Traders) report. This report specifies the positioning of various players in the market. The report is released every Friday and shows the open interest recorded on the previous Tuesday.
Compared to its closest peers, Kinross Gold (KGC) has been a high-cost gold producer. Higher costs make its cash flows more leveraged against changes in revenue. As a result, Kinross is highly leveraged to gold prices compared to its peers (GDX) Goldcorp (GG), Barrick Gold (ABX), and Newmont Mining (NEM).
Along with its Q2 2018 results, Kinross Gold (KGC) provided an update on its organic development projects. The construction of Kinross Gold’s Tasiast Phase One expansion is complete, and its first ore has gone through a Semi-Autogenous Grinding (or SAG) mill. The company also stated that during the past month, throughput has continued to ramp up and has peaked at 12,000 tons per day. As we highlighted in Geopolitical Concerns Overwhelm Kinross Gold, Stock Plunges 11%, the company received a letter in May from the government of Mauritania about its desire to participate more in the company’s activities in the country.
Kinross Gold (KGC) released its Q2 2018 results after the market closed on August 1 and held the conference call the next day. Most of Kinross’s peers have already reported their Q2 2018 results. Barrick Gold (ABX), Goldcorp (GG), and Agnico Eagle Mines (AEM) missed their earnings estimates. Agnico Eagle Mines missed its earnings estimate by a wide margin and reported EPS of $0.01.
Free cash flow (or FCF) generation helps a business’s long-term prospects and helps generate shareholder value. Barrick Gold (ABX) has a strategy of value over volume, which prioritizes profitable production. The company defines value creation for shareholders in terms of FCF per share. Barrick Gold (ABX) generated FCF of -$172.0 million in the second quarter, which broke its streak of 12 consecutive quarters of positive FCF.
What Sent Yamana Gold’s Stock Up 10% after Its Earnings Release? Yamana Gold (AUY) announced the ramp-up of commercial production at its newest mine, Cerro Moro, on June 26. Currently, the mill throughput rate at Cerro Moro is ~900 tons per day, which is 90% of its capacity. Its gold and silver recovery rates are 91% and 87%, respectively.
Yamana Gold (AUY) released its Q2 2018 results after the market closed on July 26 and held a conference call the next day. Its EPS of $0.20 and revenue of $431.5 million were in line with market expectations. While its earnings didn’t surprise investors, the company’s production was higher than expected, boosting its stock by a whopping 10.1% on July 27.
Goldcorp's (GG) earnings and revenues fall short of expectations in Q2. The company continues to expect gold production to be around 2.5 million ounces for 2018.
Southern Ecuador is home to some promising mineral reserves, but the region had been abandoned in early 2000's due to restrictive government oversight. With new legislators, the area is again open to foreign investment, and large companies are making substantial investments in well-explored deposits. One of the most promising mines, Fruta Del Norte, was sold for $1.2 billion, and now a similar concession just 40 km away is being explored by another junior miner, Lucky Minerals (LJ).
Coeur Mining (CDE) reported its second-quarter earnings on July 25 after the market closed. The company reported an EPS of $0.01, which beat the consensus expectations by $0.02. Coeur Mining’s revenues of $70 million missed the consensus estimate by $3 million. The company’s peers (GDX) missed the estimates as well including Barrick Gold (ABX), Goldcorp (GG), and Agnico Eagle Mines (AEM). Agnico Eagle missed the earnings estimates by a wide margin and reported an EPS of $0.01—compared to the consensus of $0.08. Goldcorp and Barrick Gold reported an EPS of $0.02 and $0. ...
Barrick Gold (ABX) reported its Q2 2018 earnings yesterday after the market closed. The company reported adjusted EPS of $0.07, which missed analysts’ expectations by $0.04. Its revenues amounted to $1.71 billion, which missed expectations by 6.0%. The results stood in contrast to the company’s Q1 2018 earnings beat. The stock’s momentum in after-hours trading was weak after the miss.
Goldcorp (GG) reported its Q2 2018 earnings on July 25 after the market closed. Goldcorp along with Barrick Gold (ABX), Agnico Eagle Mines (AEM), and New Gold (NGD) kickstarted the gold sector’s (GDX) earnings season yesterday. The company’s revenues and earnings came in below consensus expectations.
Agnico Eagle Mines (AEM) reported its second-quarter earnings on July 25 after the market closed. The company missed analysts’ consensus estimate of $0.08. Agnico Eagle Mines’ peers (GDX) including Barrick Gold (ABX), Goldcorp (GG), and New Gold’s (NGD) earnings missed the estimates in the second quarter. Agnico Eagle Mines’ revenues of $556 million were slightly ahead of the consensus expectations of $544 million.
Canadian miner Goldcorp Inc posted a lower-than-expected adjusted quarterly profit on Wednesday, as its gold production dropped and foreign exchange currency costs spiked. The company, the world's fifth-biggest gold miner by market value, posted a net loss of $131 million, or 15 cents per share, compared with a net profit of $135 million, or 16 cents per share, in the year-ago period. Goldcorp lost $178 million during the quarter on forex charges linked to deferred taxes.