Mon, Aug. 17, 6:16 AM
Thu, Aug. 13, 9:19 AM
Mon, Aug. 3, 11:38 AM
- South Africa's second biggest gold miner's union rejected a pay offer over the weekend made by operators including AngloGold Ashanti (AU -1.9%) but stopped short of calling a strike.
- AU and Sibanye Gold (SBGL -5.1%) proposed on July 30 to raise monthly pay for entry-level workers by 1,000 rand/year ($79) for the three years starting July 1, while Harmony Gold (HMY -3.4%) offered a 500-rand increase.
- The AMCU union is demanding 12.5K rand/month for basic pay, more than double the current basic pay of ~5,800 rand, while the National Union of Mineworkers lowered its demand last month to 9.5K rand/month, still at least 60% more than the current wage.
- AU, SBGL and HMY are at or near 52-week lows in today's trade as gold futures prices continue to fall further below $1,100/oz.
Fri, Jul. 24, 9:17 AM
Mon, Jul. 20, 10:39 AM
- Several gold miner stocks strike new 52-week lows in early trading, as gold prices plunge below $1,100/oz. overnight and adding pressure to a sector that already faces razor-thin margins.
- Investors have turned sharply negative on gold as the U.S. dollar rises ahead of a likely rise in interest rates, and a report out of China shows lower than expected holdings of the metal.
- While most senior gold miners can generate decent margins at $1,100 gold, many small and mid-tier producers are underwater at the price, and some of the seniors are struggling with heavy debt.
- Hitting new 52-week lows today: ABX -9.3%, GG -7.7%, GFI -10.7%, KGC -9.4%, AGI -6.6%, AU -9.7%, SBGL -7.8%, BTG -9.3%, EGO -2.9%, NGD -8%, AUY -8.8%, RGLD -8.2%, FNV -6.8%, SLW -5%.
- Also lower: NEM -9.4%, AEM -7.9%, NG -7%, GOLD -4.8%, IAG -5.1%, HL -5.4%.
- ETFs: GDX, NUGT, GDXJ, GGN, DUST, SIL, JNUG, GLDX, JDST, SGDM, ASA, SLVP, SILJ, RING, JUNR, PSAU, TGLDX, GDJJ, GDXS, GDXX, GDJS
Mon, Jul. 20, 9:14 AM
Fri, Jul. 17, 2:58 PM
- Barrick Gold (ABX -4.9%) sinks to 24-year lows in Toronto trading, leading a rout among bullion miners as the yellow metal extends its selloff to five-year lows.
- ABX is under particular pressure, as the fall in gold casts doubt on the company’s strategy of shedding assets to pay down its $12.9B debt, as it "becomes harder and harder to sell those assets at any kind of reasonable value if metal prices are unwinding," Macquarie analyst Ron Stewart says.
- ABX reportedly is nearing a deal to sell its Zaldivar copper mine in Chile, and is looking for buyers for its 50% stake in its Kalgoorlie mine, among other properties.
- NEM -2.6%, GG -5.7%, GFI -1.1%, KGC -5.2%, AEM -5.1%, NG -2.2%, AGI -6.6%, AU -5.7%, GOLD -2.5%, SBGL -4.2%, BTG -6.4%, IAG -7.6%, EGO -7.6%, HL -3.5%, NGD -8.4%, AUY -2.9%, RGLD -2.9%, FNV -3.6%, SLW -3.3%.
- ETFs: GDX, NUGT, GGN, DUST, SIL, GLDX, SGDM, ASA, SLVP, RING, PSAU, TGLDX, GDXS, GDXX
Mon, Jun. 22, 8:19 AM
- South Africa's major gold miners, including AngloGold Ashanti (NYSE:AU), Harmony Gold (NYSE:HMY) and Sibanye Gold (NYSE:SBGL), have begun talks with labor unions to discuss wage increases and other employment conditions.
- The process is expected to drag on for weeks or even months, while any strike action could further hurt the bottom lines of the country’s already-struggling mining companies amid weak gold prices and soaring electricity costs due to frequent power outages.
- Unions represent more than 80% of South Africa’s gold workers and say the companies can afford an increase of more than 80% in the basic monthly pay of entry-level underground miners.
- HMY -6.2%, AU -1.1% premarket.
Thu, Jun. 18, 12:46 PM
- Newmont Mining (NEM +1.6%) is reiterated with a Buy rating and $29 price target at Citigroup following its recent acquisition of the Cripple Creek & Victor gold mine from AngloGold (AU +4.3%).
- Citi cites NEM’s free cash flow generation profile at $1,200/oz. gold and further debt reduction opportunities, and says the transaction appears earnings accretive by 3.2% in 2016 while free cash contribution is not expected until 2017.
- NEM's decision to fund the sale by issuing equity was attributed to the need for capital to finish funding growth projects and desire to pay down $750M of debt this year, but the firm forecasts NEM will still generate $600M-plus/year in free cash flow (after project capex) from 2015-17 at $1,200/oz. gold.
Tue, Jun. 9, 10:23 AM
- AngloGold Ashanti (AU +8.5%) surges at the open following the sale of its Cripple Creek & Victor mine to Newmont Mining (NEM -1.5%), ending speculation it would have to issue shares in its effort to cut $3.1B in debt.
- CEO Srinivasan Venkatakrishnan says the sale of the Colorado mine for $820M plus 2.5% of future gold production will reduce AU’s net debt to its target level of 1.5x earnings.
- Proceeds from the sale represent ~25% of AU’s market value, while the asset produced less than 5% of the company’s gold, the CEO says, adding that the sale will save $200M on capital spending in the next two years.
- The sale benefits NEM too, Sterne Agee analysts say, adding a large long-life mine to its U.S. profile with expansion potential, improving geographic mix, lowering NEM's overall all-in sustaining costs profile, and appearing accretive on a production per share basis.
- However, Jefferies says the fact that NEM is funding the acquisition with an equity issue may indicate that NEM shares are overvalued.
Tue, Jun. 9, 9:17 AM
Mon, Jun. 8, 4:36 PM
- Newmont Mining (NYSE:NEM) -1.5% AH after agreeing to acquire the Cripple Creek & Victor gold mine in Colorado from AngloGold Ashanti (NYSE:AU) for $820M in cash plus a 2.5% net smelter return royalty for gold production from potential future underground ore.
- NEM believes the deal will add 350K-400K oz./year of gold in 2016 and 2017 at all-in sustaining costs of between $825-$875/oz.
- To fund the deal, NEM plans to conduct a public offering of 29M common shares, with an underwriters option to purchase up to an additional 4.35M shares.
Mon, Jun. 8, 12:19 PM
- AngloGold Ashanti (AU -1%) and Acacia Mining (OTC:ABGLF) are the miners in Africa that should be best positioned for increased production growth, RBC says, adding that it also likes Asanko Gold (AKG +1.2%) and Aureus Mining (OTC:ARSMF).
- RBC says Acacia (formerly African Barrick Gold) has made significant progress, driving down all-in sustaining costs to below $1,100/oz. and increasing production guidance; for AU, the firm expects the combination of improved operating performance following the placing of the Obuasi mine on care and maintenance, and the likelihood of asset disposals to support a re-rating of the stock.
Tue, Jun. 2, 7:57 AM
- Newmont Mining (NYSE:NEM) is in exclusive talks with AngloGold Ashanti (NYSE:AU) as it moves closer toward clinching a deal to buy the latter's Cripple Creek & Victor gold mine in Colorado, Reuters reports.
- If AU agrees to a sale, the asset is likely to fetch a price in the $700M-$800M range, according to the report, which would be well below the $1B initially speculated by analysts.
- Others that may still re-enter the bidding if NEM fails to strike a deal are Canadian miners Iamgold (NYSE:IAG), Kinross (NYSE:KGC), Goldcorp (NYSE:GG) and Yamana (NYSE:AUY); Hecla Mining (NYSE:HL) has said it looked at the mine but decided against making a bid for it.
- AU said in April it was seeking a partner or buyer for the mine as it attempts to cut $3.1B in debt; Cripple Creek & Victor is an open pit mine that produced 211K oz. of gold and 110K oz. of silver in 2014.
Wed, May 13, 2:49 PM
- South Africa's Association of Mineworkers and Construction Union says it wants to more than double the basic pay for entry level workers in the gold mining industry, setting the stage for tough pay talks as the companies battle rising costs and falling profits.
- The country's top bullion producers, including AngloGold Ashanti (NYSE:AU), Sibanye Gold (NYSE:SBGL) and Harmony Gold (NYSE:HMY), say high pay increases would lead to the decline of a struggling industry.
- AMCU also called for a doubling of wages in the platinum sector last year, sparking a long strike, before settling for raises of ~20%/year; platinum miner Lonmin (OTC:LNMIF) said last week it would cut 3,500 jobs at its South African mines.
- The rival the National Union of Mineworkers, vying for popularity with AMCU, secured a wage deal with Gold Fields (NYSE:GFI) in April, and is said to seek up to 75% wage hikes from the rest of the sector.
Mon, May 11, 8:39 AM
- In its Q1 results, AngloGold Ashanti (NYSE:AU) reported production totaled 969K oz., beating the company’s guidance of 900K-940K oz., while all-in sustaining costs fell 9% Y/Y to $926/oz.
- However, South African production fell 18% to 239K oz., partly as a result of safety-related interruptions, as well as a 12% rise in all-in sustaining costs.
- Expects Q2 production of 960K-1M oz., and says capex for the year remains unchanged at $1B-$1.1B.
- CEO Officer Srinivasan Venkatakrishnan says in the earnings call that the company will present a tradeoff between pay increases and job losses to South African unions when wage negotiations begin next month.
- Also says it is testing market interest for the sale of all or part of its Cripple Creek & Victor mine in the U.S., and is in talks to sell its stake in the Sadiola and Yatela mines in Mali, with the proceeds of any potential sales earmarked to reduce debt levels.
- AU +1.2% premarket.
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