Credit Suisse Credit Suisse analyst Fahad Tariq expects a better second half of 2023 for precious metals companies.
“Gold producers in our coverage continue to guide to H2-weighted production,” he said. “For some companies, production will have to pick up meaningfully to meet annual production guidance (e.g., Newmont, Barrick), while other companies can achieve annual guidance even if production remains flattish in H2 (e.g., Agnico Eagle, Alamos Gold, New Gold). As a result of the higher production, costs are generally expected to decline in H2.”
“In Q2-23 conference calls, management teams generally noted stabilizing input costs and/or initial signs of easing inflationary pressures, but no meaningful improvements to the overall cost structure yet. Consumables prices have started to soften a little (e.g., diesel) while elevated labour costs remain a challenge, particularly for Canadian operations. On opex, IAMGOLD is now guiding to the top end of its 2023 cash cost and AISC guidance ranges (i.e., approximately $1,700/oz AISC [all-in sustaining costs]), citing ‘cooling, yet still present, inflationary pressures.’ On capex, Eldorado Gold plans to update its Skouries Feasibility Study capex estimate by the end of Q3-23 based on major contracts to be executed in Q3 and other new information.”
In a research note released Thursday, Mr. Tariq raised his targets for these companies:
- Agnico Eagle Mines Ltd. ( “outperform”) to US$61 from US$60. The average is US$66.60.