Gold miners to slash reserves as price drop forces revision
RACHELLE YOUNGLAI - MINING REPORTER
After years of costly mistakes, the new chief executives of Barrick Gold Corp. and Kinross Gold Corp. have ushered in an era of austerity in the precious metal sector.
The results of their labour will be on display when Canadian mining companies report fourth-quarter earnings this week.
Investors are already expecting gold producers to reduce their bullion reserves, write down more assets and record lower profits.
But the bad news may soon be ending with companies adjusting to the lower gold price.
“The worst is over,” said John Ing, president of investment firm Maison Placements Canada Inc. in Toronto.
That doesn’t mean the picture will be pretty this quarter.
Barrick CEO Jamie Sokalsky told investors that the company will use a $1,100 (U.S.) price to calculate its unmined gold. That is down sharply from the $1,500 price assumption used to calculate last year’s reserves.
To continue reading this article please click here
In September 2011 the Gold Bugs index, the HUI stood at 630 as gold prices peaked, since then both have trended lower with the HUI losing about 65% of its value. The bottom has been called a number of times and after such a dramatic decline its difficult not to think that we are there now. However, as we all know the timing of any investment is crucial to its success and that is exactly what we are trying to do here, trying to pick advantageous entry and exit points. If you would like to know which stocks we are buying and selling please join us at ‘Stock Trader’ our premium investment service.
Subscribe for 12 months with recurring billing - $199
Buy 12 months of subscription time - $199
If you are new to investment in the precious metals sector then you can subscribe of our FREE newsletters regarding gold stocks, silver stocks and uranium stocks, just click on the links and enter your email address and we will email you our articles along with other interesting posts.
Please remember to check your spam folder once you have subscribed to ensure that our verification has not gone astray.
Reader Comments