Jul. 10, 2014, 10:54 AM
- Eldorado Gold (EGO -0.6%) is downgraded to Hold from Buy with a $9 price target at Canaccord, which notes that shares have outperformed gold miner competitors by 14%.
- The firm says EGO is experiencing a closing gap in valuation due to its expansion plan with its Kisladag, Olympias and Skouries assets, leading it to take a more conservative approach on the shares.
- EGO is one of the few major gold miners not sporting a gain in early trade, as overseas events have boosted the sector: NEM +1%, GG +1.2%, ABX +1.3%, KGC +1%, AEM +1.5%, AUY +2.4%, NGD +3.2%, FNV +1.9%, AGI +0.9%, AU +0.5%, BTG +0.3%, GFI -0.5%, IAG -1.3%.
Jun. 20, 2014, 3:22 PM
- It's a good idea to have exposure to gold stocks in one's portfolio, say JPMorgan analyst John Bridges and team, but beware of sector plays (GDX -1.3%), and instead pick and choose carefully.
- Goldcorp (G +0.1%) is a "simple decision stock," says the team, thanks to its strong balance sheet, growth profile, and disciplined management. Names like Barrick (ABX -1.2%), Newmont (NEM +1.1%), and Kinross (KGC -1.9%) would fare better in a gold bull market, but today's "back-to-basics phase" means valuations are driven by strong operations and accretive deals.
- Another theme is to own players with operations in the safest locations, an idea paying off for Agnico (AEM +0.7%), but the team also recently initiated B2Gold (BTG +1.1%) with positive coverage on the idea some companies can learn how to operate successfully in "more complex locations."
- Another favorite is laggard Buenaventura (BVN -0.5%) which is likely to see improved results in H2.
Jun. 17, 2014, 12:26 PM
- Agnico-Eagle Mines (AEM +0.5%) is upgraded to Buy from Hold with a $42 price target, up from $31, at TD Securities following the closing of its acquisition of Osisko Mining with Yamana Gold.
- TD says AEM has all of the hallmarks it looks for in a gold equity: The company is generating free cash flow, its projects are in relatively safe jurisdictions, its balance sheet is sound, and production is expected to grow over the next three years.
- TD estimates the Osisko deal is accretive to AEM’s 2015 EPS by 4%, cash flow/share by 5% and net asset value by 5%; the firm forecasts the addition of Canadian Malartic will allow AEM to generate ~$300M/year in free cash flow that may be used to fund the company’s next generation of mines.
- Also, BMO raises its rating on AEM to Outperform from Market Perform and hikes its price target to $44 from $37.
May. 29, 2014, 7:50 AM| 1 Comment
May. 15, 2014, 5:53 PM
- John Paulson maintained his place as the biggest shareholder in the SPDR Gold Trust ETF (GLD) as of the end of Q1, keeping his 10.2M-share stake valued at nearly $1.3B while tinkering around the edges of some single-company bets in the mining sector.
- Paulson cut his stake in Freeport McMoRan (FCX) by a third and in AngloGold Ashanti (AU) by ~10%, while holding steady on positions in Agnico Eagle Mines (AEM), Allied Nevada (ANV), Gold Fields (GFI), Iamgold (IAG) and Randgold Resources (GOLD).
- His biggest new positions came in Verizon (VZ), buying ~8.75M shares worth $415.9M, and CBS, acquiring a ~4.47M-share stake worth $276.6M; he more than doubled holdings in (GM, $138M) and Cobalt Energy (CIE, $499M) while cutting his stake in Hess (HES) by 62%.
May. 2, 2014, 9:18 AM
May. 1, 2014, 6:32 PM
- Agnico Eagle Mines (AEM) +6.4% AH after Q1 earnings more than quadrupled Y/Y and beat estimates, as it set a company record for gold production with 366,421 oz. at total cash costs of $537/oz.
- AEM says it now expects FY 2014 production to come in above its previous high estimate, while costs will come in under the low of its previous forecast range.
- Q1 operating activities provided $247M of cash, up from $146M in the year-ago quarter, despite lower gold prices.
- Sees 2014 capex of $431M, more than previous guidance of $416M, as several new projects were approved.
May. 1, 2014, 4:31 PM
Apr. 30, 2014, 5:35 PM
- ABFS, ABTL, ACGL, ADNC, ADUS, AEM, AFFX, AHS, AIV, AKAM, ALDW, ALJ, AVD, BAGL, BBG, BCOR, BJRI, BKH, BMRN, BYI, CALD, CERS, CHGG, CPSI, CSOD, CTCT, CTRL, CUBE, CVD, DCT, DGI, DRC, DVA, DXCM, EGO, EHTH, ELLI, ENTR, EPAY, EXEL, EXPE, FI, FLR, FLT, GERN, HCI, HME, HT, HTCH, HTGC, IMMR, IMPV, INVN, IPXL, ITMN, KEYW, KOG, KRFT, LAYN, LNKD, LNT, LRE, MCRS, MHK, MITK, MODN, MOH, MRC, MTW, MTZ, MXWL, NGVC, NTRI, NU, OIS, OMCL, ONNN, ONTY, OPEN, OUTR, PCCC, PKT, PMCS, PSA, QLGC, RBCN, SBAC, SEM, SGEN, SKUL, SNAK, SPF, SQNM, SREV, SSNC, SWIR, SWN, TEG, TPX, TS, TSYS, VRTX, WU, WWWW, WYNN, XL, XPO.
Apr. 23, 2014, 11:19 AM
- Yamana Gold (AUY -0.6%) and Agnico Eagle (AEM +2%) are "clear winners" for acquiring Osisko Mining (OSKFF) because it is crucial for gold miners to secure low-risk production at this stage in the cycle, National Bank analyst Steve Parsons says.
- It is increasingly difficult to find large gold deposits in mining friendly jurisdictions - such as Osisko's Canadian Malartic mine in Quebec - and companies need to look at obtaining those assets now or face declining production profiles in the future, Parsons says, adding that now is a good time for mid-tier miners to do business with senior producers who are busy cleaning up their balance sheets.
- For AUY, Parsons says the addition of a low-cost, cornerstone asset should help the stock get re-rated towards its higher-multiple peers; for AEM, the deal is accretive on all metrics and adds another cornerstone asset to its already concentrated portfolio.
Apr. 23, 2014, 9:49 AM
- Agnico Eagle Mines (AEM +1.9%) is upgraded to Outperform from Sector Perform with a $43 price target at RBC Capital following the combined bid with Yamana for Osisko, which is expected to succeed as Goldcorp's (GG) final offer has now expired.
- The firm views the overall transaction as positive and accretive to EPS and cash flow/share, and sees recent share price weakness as creating an attractive entry point.
Apr. 21, 2014, 12:51 PM
- Goldcorp (GG +0.8%) officially gives up its bid for Osisko Mining (OSKFF -0.1%), saying it will not raise its offer to acquire the company; its most recent C$3.6B offer will expire tomorrow night before midnight.
- Yamana Gold (AUY -3.5%) and Agnico Eagle Mines (AEM -3.7%) joined forces last week for a C$3.9B offer to acquire Osisko.
Apr. 17, 2014, 2:59 PM
- After getting the best deal he could for Osisko Mining (OSKFF) with the friendly $3.9B combined offer from Yamana Gold (AUY) and Agnico Eagle Mines (AEM), thwarting Goldcorp's (GG) out-of-the-blue hostile offer, CEO Sean Roosen lashes out at the Canadian system that led to the outcome.
- "The bigger companies basically have free range to rape and pillage," Roosen says, believing large companies benefit from rules requiring Toronto-listed bidders to win approval from their own shareholders for an acquisition being paid for with a new share issue equal to more than 25% of the current float.
- Poison pills in Canada are limited in duration, unlike in the U.S. where they can, at least in theory, last forever.
Apr. 16, 2014, 12:46 PM
Apr. 16, 2014, 9:51 AM
- Yamana Gold (AUY -1.5%) and Agnico Eagle Mines (AEM -3.3%) agree to acquire Osisko Mining (OSKFF) for C$3.9B, or C$8.15/share.
- The total offer consists of C$1B in cash, C$2.33B in AUY and AEM shares, and shares of a new company with an implied value of ~C$575M.
- The companies say the offer represents an ~11% premium to the implied value of Goldcorp's (GG +2%) hostile bid.
- The deal replaces a transaction announced April 2 in which AUY agreed to buy 50% of Osisko’s assets.
Feb. 13, 2014, 3:53 PM
- Agnico Eagle Mines (AEM +1.9%) continues to gain strength despite cutting its dividend, after reporting Q4 earnings that beat forecasts and finishing 2013 with production ahead of guidance and costs below guidance.
- AEM says all-in sustaining costs of mining were $952/oz. in 2013, below guidance of $1,025/oz., adding that it has lowered its cost per ton at many mines while also raising production.
- With growth projects well underway at several operations, AEM is able to cut its capital spending while maintaining growth, Cowen analysts say.
- Reports record annual gold production at Meadowbank: 430,613 oz. at a total cash cost of $774/oz.
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