RE: RE: their ad on kitco spot gold chartRelax, APO you will get your financial report (see the article below).
By the time the Olympics are over LMA will be surfing north of $2.5. AK
Canadian gold miners set for good quarter
Gold prices have surged, while costs remain steady
Cameron French
Tuesday, February 16, 2010
Toronto — Canadian gold miners areset to report a sharp jump in fourth-quarter profits thanks torecord-setting bullion prices, muted cost increases and recoveringprices for base metals.
With goldhaving hit an all-time high of $1,226.10 (U.S.) an ounce in the finalmonths of 2009, analysts say profits will be driven by a record gapbetween gold prices and mining costs, despite cost pressure from theweak U.S. dollar.
“We believe that the margins will still increase, and hence earningswill be better,” said Paul Burchell, an analyst at Dundee Securities inToronto.
Top miners Barrick Gold Corp.and Goldcorp Inc.should both see a doubling of underlying profit for the quarter endedDec. 31 from the year before, according to Thomson Reuters I/B/E/S. No. 3Canadian miner Kinross Gold Corp.should see underlying profit -- which excludes exceptional items anddiscontinued operations -- rise 75 percent.
Kinross, Agnico-Eagle Minesand Iamgold Corp.will kick off the gold earnings rush Wednesday.
The expected sharp rise from a year before is largely due to thecontrast between metals prices, which plunged late in 2008 when theglobal economic crises hit hard.
Even gold, usually seen as a safe haven in times of crises, dippedbelow $800 an ounce during the final months of 2008. The metal currentlytrades around $1,120.
Metals such as copper and zinc - which factor into results ofBarrick, Goldcorp, and mid-tier miners Yamana Gold Inc.and Agnico-Eagle - all but crashed in late 2008, but have since morethan doubled as the economy has healed.
Meanwhile, mining expenses have stayed more or less steady over thepast year, as fuel costs are well off their pre-crisis highs, while someminers use base metal production as an offset to gold mining costs.
According to National Bank Financial, the margin between average goldprices and average industry cash costs during the fourth quarter was awide $652 an ounce, up from $504 in the third quarter and $347 in thefourth quarter of 2008.
Dundee's Mr. Burchell said, however, he expects some cost inflationdue to the sharp year over year decline of the U.S. dollar - 16 per centversus the Canadian currency - which helped push up the price of gold,but also raised mining costs at operations outside of the United States.
“It is a currency issue that's driving the price gold largely, andthat also drives the costs higher,” he said.
He also pointed to a trend toward higher capital costs, which don'taffect profits, but eat away at - and sometimes completely consume -cash flows.
Goldcorp said in January, for example, that its 2010 capital costsshould be well over $1-billion, while Yamana expects to spend$515-million during the year.
The strong gains in profits will likely not have much of an impact onstock prices, which have largely underperformed the price of gold inthe past year, said John Ing, president of Toronto investment dealerMaison Placements.
While the gold price broke through to record levels last October andhas since continued higher, gold stocks as a group are still shy oflevels hit in early 2008 and roughly flat with levels one year ago.
This has been in part due to surging costs, but also to the billionsof dollars in new stock issues in the past year, which serves to diluteshare prices in the sector.
“They flood the market, so it takes a long time for it so sort ofdigest the increase in shares,” said Mr. Ing.