Editorial: Best and worst of times for gold miners

The hard truth that it’s damn difficult to mine gold consistently at an industrial scale has hit home again these past few weeks, with the release of the latest round of quarterly results from Canada’s gold miners.

Even companies that had stellar third quarters, such as Kinross Gold and Agnico-Eagle Mines, are only on the mend after a few rocky quarters the last couple of years.

Gold producers that fell short of expectations in the latest third quarter, such as Barrick Gold and Iamgold, were treated mercilessly by the markets in November.

Barrick’s share price has fallen from $40.39 on Halloween to below $35 at press time in response to its Nov. 1 third-quarter report that showed shrinking profits, ballooning capex and start-up delays at development projects, and more modest outlooks for company-wide production.

At the broader level, Barrick looks ripe for a strategic withdrawal from its gold assets in Africa. A sale to Chinese or other interests would generate billions of dollars in new funds that Barrick could use to plug financial holes at its new megaprojects in the Americas.

Even the stock phrase “the world’s largest gold miner” doesn’t automatically apply to Barrick anymore, with ever-growing Goldcorp briefly surpassing Barrick in the first week of November as the world’s largest gold miner, at least it terms of market capitalization.

Iamgold has long been a case study in the pluses and minuses of being a mine operator, with the founding Iamgold assets still having AngloGold Ashanti as operator, and the mines that were developed after the merger with Cambior being operated in-house.

In its recent third quarter, though, both assets underperformed, and investors pummelled the stock, with shares trading down an incredible 19% in a day, with no recovery since.

• Low-level conflict continues around the developing world between Canadian-listed mining companies and local government, with a couple of new developments: In Papua New Guinea, Nautilus Minerals has pulled the plug for now on its experimental Solwara 1 deep sea mining venture after a funding dispute with the PNG government; and MAG Silver has run into local opposition in Mexico’s Chihuahua state over its Cinco de Mayo project, with a local Ejido ostensibly inducing 100 years of solitude for miners with a blanket, century-long mining ban in the region.

• Late November was one for the Democratic Republic of the Congo skeptics, as 1,500 members of the M23 rebel group (whom some allege are backed by Rwanda) effortlessly seized the 1-million-strong lakeside city of Goma in the eastern DRC, generating fears of a whole new wave of violence in the country’s northeast.

According to the BBC, the United Nations said it had received reports that the rebels had abducted women and children from Goma, and carried out killings and looting.

Incredibly, some 1,500 United Nations peacekeepers were in the city as it was being seized, but they decided to hold their fire and instead, in the words of a UN deputy spokesperson to the BBC, “observe what is happening and remind the M23 that they are subject to international humanitarianism and human rights law.”

A day after seizing the city, the rebels were reportedly ordering local police and national troops to report to a stadium to turn in their weapons.

• It’s getting time again for us to settle on this year’s Mining Person(s) of the Year. If you’d like to nominate a favourite, please email us within the next few weeks at jcumming@northernminer.com. 

Generally we’re looking for a person or team connected somehow to North America who have had a stellar year after a sustained effort, and whose success has greater meaning to the industry as a whole.

Recent TNM Persons of the Year include: Ross Beaty; Osisko’s Sean Roosen, John Burzynski and Robert Wares; prospectors Sean Ryan and Cathy Wood; Aurelian’s Patrick Anderson, Keith Barron and Stephen Leary; Robert Friedland; and Agnico-Eagle’s Sean Boyd and Ebe Scherkus.