Credit Suisse Previews Gold Producer Earnings

With gold prices finishing 2007 at $834 per ounce, up 12% in the fourth quarter and averaging $789, investors are eager to see what fourth quarter and annual earnings will look like from North American producers. The results begin to flow this week, but the day to watch is February 21, when the four biggest names in the business report: Barrick Gold Corp. (ABX), Newmont Mining Corp. (NEM), Goldcorp Inc. (GG), and Kinross Gold Corp. (KGC).

Meanwhile, Agnico-Eagle Mines Ltd. (AEM), which is set to report on the 20th, is one of several names that will be affected by increased Canadian dollar costs, Credit Suisse analyst Anita Soni told clients in a note. She pointed out that the loonie appreciated by 7% relative to the U.S. dollar, while the Euro rose 5%, and the Brazilian Real climbed 7% versus the greenback.

NXG vs AUY 1-yr chart:

Other names that she expects will be impacted are Northgate Minerals Corp. (NXG) and Goldcorp given their significant Canadian production. Yamana Gold Inc. (AUY) will be the most impacted by the Real’s appreciation since it has more than 90% of current production in Brazil, Ms. Soni added.

GSS vs EGO 1-yr chart:

Her price targets for Agnico is C$70, Barrick is $59, and Goldcorp is $44, and all rated “outperform.” Kinross is rated “neutral” with a C$23 price target, as is Golden Star Resources Ltd. (GSS) with a C$4.50 target, and Eldorado Gold Corp. (EGO) at C$7.50.

ABX vs NEM vs GG vs KGC 1-yr chart:

Ms. Soni rates both Northgate and Yamana at “outperform” with target prices of C$4.40 and C$19, respectively.

Credit Suisse believes gold will continue its ascent in 2008 and remain in sight of the $1000 per ounce mark due to weakness for the U.S. economy and continued investment demand. Ms. Soni also believes central bank sales of gold will be light in the first half of 2008.

The firm recently boosted its gold price forecasts for 2008 to 2012 to to $950, $1,035, $1,068, US$1,117 and $1,145 per ounce from $700,$750, $650, $600 and $600, respectively.

Comments

[ED K]

I THINK PRICES FOR MOST OF THESE GOLD COMPANIES ARE A BIT CONSERVATIVE,ESPECIALL... THE ONES THAT ARE ANTICIPATING PRODUCTION FROM MINES CURRENTLY NOT PRODUCING.AS GOLD ELEVATES IN PRICE SO DOES PROFIT PER OUNCE.

[gogo]

Gold was , is , and always will be the safest form of wealth one can have. For this reason , and because the world is full of geo-political uncertainties, the sky is the limit.