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Barrick Gold and Buenaventura held back by political risk, JPM says

  • Barrick Gold (ABX -1.7%) and Buenaventura (BVN +3.4%) look cheap among gold miners in the Americas, J.P. Morgan says while still giving both Neutral ratings because of political risk; ABX has added uncertainty around its balance sheet.
  • The firm says ABX’s cash flows have become more difficult to forecast, given uncertainty around two key assets: Fiscal problems in the Dominican Republic will channel half of the early cash flows from the Pueblo Viego project away from ABX, plus the negative ruling from the Chilean court has forced a halt to construction on the Chilean side of the Pascua Lama property.
  • On BVN, the tax problem for Peru's resource industry was resolved but the Conga project has become tied up in political disputes linked to positioning for the next election.
  • JPM prefers Buy-rated Goldcorp (GG -1.6%), Newmont Mining (NEM -1.3%) and Eldorado Gold (EGO -0.6%).
Comments (1)
  • TDWelander
    , contributor
    Comments (644) | Send Message
     
    JPM preferences do not match the big picture. Specifically, the over all risk comparisons of JPM appear erroneous, misplaced, or not correctly prioritized; based on operating costs, mine diversity, gold yield from raw ore, company by company.

     

    Or more salesmanship from JPM instead of reality. Based on my readings, I would not buy GG or NEM or EGO on a bet.
    19 Sep 2013, 12:14 PM Reply Like
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