Miners' reserve-to-resource production ratios overstated, Barclays says

|By:, SA News Editor

Barclays argues that reserve-to-resource production ratios at North American gold miners are overstated, as reserves and resources associated with shelved development projects remain on company statements.

The firm says Eldorado Gold (EGO) has the longest reserve/resource life among its coverage companies (39 years) on an adjusted basis, with Goldcorp (GG) having the longest reserve/resource life (23 years) among senior producers vs. the group average of 22 years.

Kinross Gold (KGC) and Iamgold (IAG) have the shortest adjusted reserve/resource lives among senior and mid-tier producers (18 and 14 years, respectively).

On a percentage basis, the companies most affected by the adjustment are New Gold (NGD) and IAG, which both saw reserve/resource lives fall by 47%; however, NGD still enjoys the second longest reserve/resource life (37 years).

Newmont Mining (NEM) was the least affected by the adjustments, with reserve/resource life declining by only 12% to 22 years from 25 years.