Analyst Rating National Bank’s Mike Parkin, Shane Nagle and Don Marco expect the fourth-quarter of 2021 to display “strong” cash flows for precious metals companies, citing “general guidance trends for 2021 calling for a stronger second half as catch-up capex spending was completed in the first half of the year, and generally, mines were expected to transition into stronger production periods in the second half thanks to either increased mining rates and/or expected improved grade profiles.”
In a research report released Thursday, they said a key focus of earnings season will be on mine site staffing given the “rapid onslaught” of the Omicron variant. They are lookin for “a signal to expect a weak Q1 in the making.”
“With respect to earnings results, we see a positive tailwind from concentrate provisional pricing as all key metals finished up quarter-over-quarter (gold up 4.1 per cent, copper up 8.9 per cent and silver up 5.1 per cent),” they said. “We expect cost pressures from inflation to generally weigh on Q4 earnings, with modest FX weakness Q/Q doing little to offset these pressures. For some of our producing companies, the outlooks for 2022 have already been provided; for the remaining companies, we should see 2022 guidance come out with earnings. Generally, for the companies that have provided guidance, the releases have noted inflationary pressures as a key reason for higher operating and capital costs year-over-year.”
The analysts made several minor target price adjustments, including these changes for senior and intermediate producers:
- B2Gold Corp. (
, “outperform”) to $7.75 from $8. The average on the Street is $7.82.