"Free cash flow is king," write Credit Suisse's Anita Soni and Robert Reynolds in their gold company outlook, and those miners who have more of it (see chart) will see the best stock performance. Top picks are Agnico-Eagle (AEM -1.3%), Kincross (KGC -2.4%), and Osisko (OSKFF -2.5%).
The current price of gold near $1,200 is key, and if the metal stays near that level in 2014, expect Newmont Mining (NEM -3.6%) to consider a dividend cut, and Eldorado (EGO -3.9%) and New Gold (NGD -4.1%) to defer capital-spending plans. Agnico too would have to consider more cost cuts or a dividend trim to avoid drawing on its credit line.
Iamgold (IAG -2.1%) would have to convince its JV partner to shut down Sadiola or consider exiting the partnership.