Many companies published their second-quarter earnings on July 27, including gold miners Barrick Gold (TSX: ABX; NYSE: ABX), Agnico Eagle Mines (TSX: AEM; NYSE: AEM), Goldcorp (TSX: G; NYSE: GG) and Kinross Gold (TSX: K; NYSE: KGC). Here’s what you need to know:
Barrick continued strong, with second-quarter adjusted earnings of US$158 million, or US14¢ per share, in line with analysts’ expectations and above the US5¢ per share earned a year ago.
While gold production fell 8% year-over-year to 1.34 million oz., all-in sustaining costs improved 13% to US$782 per oz. gold.
Barrick generated US$274 million in free cash flow, marking its fifth straight quarter of positive free cash flow.
The mill at Agnico-Eagle Mines and Yamana Gold’s Canadian Malartic gold mine in Quebec. Credit: Agnico Eagle Mines.
It has lowered its debt US$968 million year-to-date, and is on track to achieve its US$2-billion debt reduction target for the year. As part of this goal, Barrick intends to sell its 50% interest in Kalgoorlie Consolidated Gold Mines, where Newmont Mining (NYSE: NEM) holds the other half. Raymond James analyst Phil Russo values the asset at $1 billion. The major has reportedly also considered selling its 64% stake in Acacia Mining.
In Toronto, Barrick shares fell 19¢ to close July 28 at $28.03. The stock is up 174% since 2015, partly due to the 26% increase in spot gold prices, which recently closed at US$1,334.60 per oz.
Agnico shone in the three months ended June. It reported an adjusted profit of US$35 million, or US16¢ per share, beating the average US10¢ per share that analysts had expected. It earned an adjusted US9¢ per share in the same period last year.
Gold production came in at 408,932 oz. gold, at all-in sustaining costs on a by-product basis of US$848 per oz., both in line with the earlier year’s figures.
The Meliadine gold project in Nunavut is now fully permitted, after receiving the final Type A water licence in May.
The producer has cut its net debt by US$181 million to US$742 million, while boosting its quarterly dividend 25% to US10¢.
Agnico shares advanced 3% to $74.53 on the financials. The stock is up 105% this year.
Goldcorp missed expectations, with a net loss of US$78 million, or US9¢ per share, due to lower production at the Cerro Negro and Penasquito mines in Argentina and Mexico. This compares to earning US47¢ per share a year ago.
“After adjusting for one-time items we calculate earnings of nil, which missed consensus of US4¢ per share,” Desjardins analyst Michael Parkin says.
Gold production totalled 613,400 oz. at all-in sustaining costs of US$1,067 per oz., compared to 908,000 oz. produced at all-in sustaining costs of US$853 per oz. in 2015.
Workforce reductions at Cerro Negro should deliver US$65 million in annual savings, while Goldcorp has identified another US$55 million in annual administrative savings. The company expects to achieve its US$250 million annual savings target by 2018.
It has approved expansions at Penasquito and the Musselwhite mine in Ontario, while closing the Kaminak Gold acquisition.
Goldcorp lost 6% on the financials to close July 28 at $23.36 per share. Its shares have increased 46% since 2015.
Kinross recorded slightly higher production and lower costs in the June quarter. Gold equivalent production came in at 671,267 oz. at all-in sustaining costs on a by-product basis of US$976 per oz. gold.
Despite that, it reported an adjusted net loss of US$9.8 million, or US1¢ per share, in line with a US1¢ per share loss a year ago. Analysts on average had projected a profit of US1¢ per share.
Kinross expects the Tasiast mine in Mauritania will return to normal operations in August. It will temporarily suspend operations at its Brazilian Paracatu’s Plant 1 facility in the second half of the third quarter due to low rainfall.
Kinross also expects to suspend mining and begin residual leaching at the Maricunga mine in Chile in the fourth quarter.
It has made no changes to its 2016 production and cost guidance.
Kinross shares stayed relatively flat to close July 28 at $6.63. The stock has gained 164% this year.
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