Same Story - different newspaper TD ANALYST story
FP says Eldorado, others top picks for TD's Barnes
2014-11-06 09:37 ET - In the News
See In the News (C-ELD) Eldorado Gold Corp
The Financial Post reports in its Thursday, Nov. 6, edition that a weakening gold price is raising the prospect of another round of dividend cuts if prices hover near $1,100 an ounce. The Post's Jonathan Ratner writes in the Trading Desk column that TD Securities analyst Greg Barnes believes the balance sheets of most producers could withstand that price level. He says, however, that Detour Gold, Barrick Gold, Newmont Mining and Yamana Gold could be forced to cut their dividends, sell assets or issue additional equity. Mr. Barnes says, "Given that several producers ran their year-end 2013 reserves and impairment tests at $1,300 [an ounce] or higher, we could see more asset impairments and/or reserve reductions if low prices are sustained through year-end." He estimates that 2015 average free cash flow margins (after sustaining capital) for the large-cap gold producers would fall to about 5 per cent at $1,100, versus about 10 per cent at $1,250. That would leave little cash flow for growth capital and dividends. Mr. Barnes favours those with healthy balance sheets, high margins and low political risk. His top picks are Eldorado Gold, Agnico Eagle Mines, Goldcorp, B2Gold and Lake Shore Gold.