http://www.straightstocks.com Leading Stock Market News, Opinions and Commentary Thu, 26 Nov 2009 10:32:19 +0000 http://wordpress.org/?v=2.8.5 en hourly 1 http://www.straightstocks.com/stock-watch/goldcorps-profit-doubled-analyst-blog/ http://www.straightstocks.com/stock-watch/goldcorps-profit-doubled-analyst-blog/#comments Fri, 06 Nov 2009 15:15:00 +0000 Zacks Market Commentaries http://www.zacks.com/stock/news/26957/Goldcorp%27s+Profit+Doubled+-+Analyst+Blog Leading gold producer, Goldcorp’s (GG) adjusted net profit in the third quarter of 2009 more than doubled to 19 cents from last year’s 9 cents on higher gold prices and lower cash costs per ounce of gold. Reported earnings were also higher than the Zacks Consensus estimate of 15 cents. 

However, on a GAAP basis, net earnings dropped 62% to 16 cents from 42 cents in the previous year due to a foreign exchange loss of $28.1 million. Revenues were up 25% to $691.9 million from $552.2 million in the previous year driven by a 12% rise in average realized prices to $968 per ounce from $865 per ounce in the year-ago quarter and a 9% increase in gold sales volumes to 601,500 ounces. 

Gold production increased by 11% year over year to 621,100 ounces compared with 557,400 ounces in 2008 following higher production at the Red Lake and Porcupine mines in Canada, Wharf mine in US and El Sauzal mine in Mexico. Total cash cost of $295 per ounce of gold reflected a 15% decline from $346 per ounce in the same quarter of the previous year. 

Operating expenses increased modestly by $24.3 million year over year, primarily as a result of increases in labour and planned maintenance costs. Long-term debt as of Sep 30, 2009 was $712.2 million, considerably higher than $5.3 million as of Dec 31, 2008. Goldcorp embarked upon external sources to finance its capital expenditure. 

However, with cash and cash equivalent of $785.3 million as of Sep 30, 2009, higher debt should not be a major concern for Goldcorp. The Canadian gold miner is the world's second-largest by market value following the Toronto-based largest gold producer, Barrick Gold Corporation (ABX). 

Goldcorp has raised its 2009 production outlook and chopped its cost guidance for the full year 2009. Gold production for 2009 has been raised to 2.4 million ounces, from the 2.3 million ounces projected in July. Last month, the company had begun producing metal concentrates at the Penasquito mine in Mexico. The project, which will yield gold, silver, lead and zinc, is on schedule to be commissioned by the end of this year. 

Goldcorp has also lowered its forecast for 2009 bringing the total cash costs to about $300 an ounce, which includes revenue from silver and copper byproducts, from $365 an ounce forecast in May. Goldcorp is developing new mines to benefit from higher prices for gold. 

However, the company is exposed to foreign exchange risk as it pays most costs in local currencies and sells metal in dollars, hurting profits when currencies such as the Mexican peso and Canadian dollar rise, in spite of the company selling more gold at higher prices.
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]]> http://www.straightstocks.com/stock-watch/goldcorps-profit-doubled-analyst-blog/feed/ 0 http://www.straightstocks.com/stock-watch/barrick-to-acquire-chilean-mine-analyst-blog/ http://www.straightstocks.com/stock-watch/barrick-to-acquire-chilean-mine-analyst-blog/#comments Tue, 13 Oct 2009 22:14:05 +0000 Zacks Market Commentaries http://www.zacks.com/stock/news/25869/Barrick+to+Acquire+Chilean+Mine+-+Analyst+Blog Barrick Gold Corporation (ABX), the largest gold mining company in the world, has entered into an agreement with Xstrata Copper Chile S.A., a wholly owned subsidiary of Xstrata Plc, to acquire Xstrata’s 70% interest in the El Morro project for $465 million in cash. Another Canadian miner, New Gold Inc. (NGD) owns the remaining 30% interest in El Morro.

The El Morro gold project is located in the Atacama Region in Chile. The project has total measured and indicated resources of about 8.3 million ounces of gold and about 6.3 billion pounds of copper. The acquisition will add another large, high quality gold-copper resource to Barrick’s portfolio.

In Chile, Barrick already controls a project, which is entering construction, called Pascua-Lama. It also has a 50% stake in another mine, the Cerro Casale project. El Morro is located near the Pascua-Lama and Cerro Casale projects. Xstrata has already spent about $70 million on a feasibility study, which Barrick is acquiring directly from Xstrata as part of this transaction.

New Gold holds a right of first refusal to purchase Xstrata’s 70% interest in El Morro and has until Jan. 11, 2010, to exercise the right. Barrick’s agreement to purchase Xstrata’s interest in El Morro is subject to the expiration or waiver of the New Gold’s right of first refusal. The transaction is expected to close prior to Jan. 30, 2010.

Going forward, Barrick Gold is hoping to benefit from three owned projects in the pipeline − Cortez Hills, Buzwagi and Pueblo Viejo. Barrick is also paying off its hedges to benefit from the rising gold prices.

However, lower realized prices and higher cash costs are expected to continue to weigh on near-term earnings. The company also expects lower production for full year 2009. Additionally, we are concerned about the slowdown in the global economy, especially in India , which absorbs about 50% of world gold production.

We maintain our Neutral recommendation on the stock.
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]]> http://www.straightstocks.com/stock-watch/barrick-to-acquire-chilean-mine-analyst-blog/feed/ 0 http://www.straightstocks.com/stock-watch/goldcorp-receives-certificate-analyst-blog/ http://www.straightstocks.com/stock-watch/goldcorp-receives-certificate-analyst-blog/#comments Tue, 08 Sep 2009 21:00:56 +0000 Zacks Market Commentaries http://www.zacks.com/stock/news/24575/Goldcorp+Receives+Certificate+-+Analyst+Blog Canada’s leading gold producer, Goldcorp Inc. (GG), recently announced that its Marlin mine in Guatemala has received certification under the International Cyanide Management Code for the use of cyanide for the production of gold.

Marlin is Goldcorp's third gold mine to receive full certification. The Marigold mine in Nevada was the first gold mine in the world to be fully certified under the Cyanide Code, followed by El Sauzal mine, which was the first gold mine in Mexico to be fully certified. The Cyanide Code is a voluntary industry program for companies involved in the production of gold using cyanide, developed with the support of the United Nations Environment Program.

This apart, Goldcorp is consistently acquiring shares in Osisko Mining Corporation, a junior gold mining company in Canada. According to the regulatory filing, Goldcorp has purchased 4.8% of Osisko Mining by buying about 8.5 million shares and 4.3 million share purchase warrants of Osisko Mining. Each warrant is exercisable for one common share of Osisko for $5.45 per share until Nov 17, 2009.

However, Goldcorp has notified that it does not have any immediate plans to increase its current 12.9% stake in Osisko. Osisko Mining owns Canada’s largest untapped gold deposit. The company is pursuing the Canadian Malartic project and has 6.28 million oz of proven and probable gold reserves at Canadian Malartic.

Goldcorp is one of the world's lowest cost and fastest growing gold producers. The company is benefiting from facility expansion, increasing gold prices and its acquisition strategy. With the Glamis Gold acquisition, Goldcorp has the best production profile among major gold companies such as Barrick Gold Corporation (ABX), Kinross Gold Corporation (KGC) and Newmont Mining Corporation (NEM).

Gold price trends remain positive, but higher interest rates and speculative concerns could push down prices. We remain concerned about Goldcorp’s near-term prospects because of its aggressive acquisition policy.

Apart from environmental and financial risks, the company also faces execution risk at its Amapari and Los Filos projects in Guerrero state. We maintain our Neutral recommendation on the stock.
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]]> http://www.straightstocks.com/stock-watch/goldcorp-receives-certificate-analyst-blog/feed/ 0 http://www.straightstocks.com/stock-watch/barrick-gold-sees-some-sparkles-analyst-blog/ http://www.straightstocks.com/stock-watch/barrick-gold-sees-some-sparkles-analyst-blog/#comments Thu, 30 Jul 2009 21:57:57 +0000 Zacks Market Commentaries http://www.zacks.com/stock/news/23049/Barrick+Gold+Sees+Some+Sparkles+-+Analyst+Blog Barrick Gold Corporation (ABX) reported a flat $492 million or 56 cents per share in profits in the second quarter of the year, compared to the year ago level of $485 million or 55 cents per share. The Canadian gold miner generated revenues of $2.03 billion, 3% higher than the year ago level.

Operating cash flow rose 42% to $718 million compared to $505 million in the same prior-year period. This reflected lower income tax payments as a result of the production mix and the use of tax loss carry forwards.

The realized gold price for the quarter was $931 per ounce, which was $33 higher than the year ago level.

Gold production reached 1.87 million ounces at total cash costs of $452 per ounce due to strong operating performance in the North and South America regions. This put the company on track with a full-year production guidance of 7.2-7.6 million ounces of gold at net cash costs of $360-$385 per ounce, or total cash costs of $450-$475 per ounce.

Its North American business produced 770,000 ounces of gold at total cash costs of $484 per ounce. This was driven by the Goldstrike operation, which produced 410,000 ounces at total cash costs of $441 per ounce as higher grade ore continued to be mined in the open pit and underground.

South American business exceeded expectations with production of 440,000 ounces of gold at total cash costs of $277 per ounce. The Lagunas Norte mine in the region continued to deliver impressive results with production of 260,000 ounces at total cash costs of $134 per ounce.

The Australia Pacific business produced 490,000 ounces of gold at total cash costs of $552 per ounce. Porgera -- the region's largest operation -- produced 140,000 ounces at lower than planned total cash costs of $491 per ounce. The Kalgoorlie mine continued to access higher grade ore and benefit from improved performance of the mining fleet, resulting in better-than-planned production and total cash costs.

The African business produced 160,000 ounces of gold at total cash costs of $539 per ounce. This included production from the new Buzwagi mine which poured its first gold in May. Buzwagi is expected to produce about 200,000 ounces of gold at total cash costs of about $335 per ounce in 2009.

Barrick continues to expect its gold production to increase to 7.7-8.1 million ounces in 2010. Total cash costs are anticipated to reduce with the start-up of the Cortez Hills project.

Barrick produced 96 million pounds of copper at total cash costs of $1.25 per pound during the quarter. This was in line with full-year copper production guidance of 375-400 million pounds at total cash costs of $1.25-$1.35 per pound. The company benefited from its copper hedge position, realizing $3.18 per pound, which was $1.06 per pound higher than the average spot price.

We continue to recommend ABX as Hold with a six-month target price of $31.50.
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]]> http://www.straightstocks.com/stock-watch/barrick-gold-sees-some-sparkles-analyst-blog/feed/ 0 http://www.straightstocks.com/gold-markets/john-kaiser-knocking-on-the-1000-door/ http://www.straightstocks.com/gold-markets/john-kaiser-knocking-on-the-1000-door/#comments Fri, 29 May 2009 20:29:30 +0000 The Gold Report http://www.straightstocks.com/gold-markets/john-kaiser-knocking-on-the-1000-door/ http://www.straightstocks.com/gold-markets/john-kaiser-knocking-on-the-1000-door/feed/ 0 http://www.straightstocks.com/financial/wednesday%e2%80%99s-market-recap-032509/ http://www.straightstocks.com/financial/wednesday%e2%80%99s-market-recap-032509/#comments Thu, 26 Mar 2009 02:57:10 +0000 Bullish Bankers http://www.bullishbankers.com/?p=11414 http://www.straightstocks.com/financial/wednesday%e2%80%99s-market-recap-032509/feed/ 0 http://www.straightstocks.com/gold-markets/james-west-economic-crisis-%e2%80%94-a-crucible-for-transforming-trashed-juniors-into-treasured-equities/ http://www.straightstocks.com/gold-markets/james-west-economic-crisis-%e2%80%94-a-crucible-for-transforming-trashed-juniors-into-treasured-equities/#comments Tue, 17 Feb 2009 22:08:47 +0000 The Gold Report http://www.straightstocks.com/?p=35891 http://www.straightstocks.com/gold-markets/james-west-economic-crisis-%e2%80%94-a-crucible-for-transforming-trashed-juniors-into-treasured-equities/feed/ 0 http://www.straightstocks.com/market-commentary/and-then-there%e2%80%99s-this%e2%80%a6tuesday-january-06th-2009/ http://www.straightstocks.com/market-commentary/and-then-there%e2%80%99s-this%e2%80%a6tuesday-january-06th-2009/#comments Tue, 06 Jan 2009 20:19:47 +0000 Contrarian Profits http://www.contrarianprofits.com/?p=10950 http://www.straightstocks.com/market-commentary/and-then-there%e2%80%99s-this%e2%80%a6tuesday-january-06th-2009/feed/ 0 http://www.straightstocks.com/small-cap-and-micro-cap-stocks/royal-gold-inc-rgld-completes-acquisition-of-royalty-portfolio-from-barrick-gold-corporation/ http://www.straightstocks.com/small-cap-and-micro-cap-stocks/royal-gold-inc-rgld-completes-acquisition-of-royalty-portfolio-from-barrick-gold-corporation/#comments Tue, 07 Oct 2008 02:54:28 +0000 QualityStocks http://Blog.QualityStocks.net/?p=12780 http://www.straightstocks.com/small-cap-and-micro-cap-stocks/royal-gold-inc-rgld-completes-acquisition-of-royalty-portfolio-from-barrick-gold-corporation/feed/ 0