Harmony: Bad News Factored In Is Good News For Investors
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Thu, Aug. 14, 8:23 AM
Wed, Aug. 13, 12:28 PM
- Austerity moves clearly have helped gold miners navigate through the lower price environment, but Citigroup analysts warn that further belt-tightening will be difficult, and may even hurt long-term prospects.
- Citi cautions that the slowdown in capex invariably will result in a fall in production, which in turn will lead to a faster rise in unit costs; also, the recent increase in head grades across the global mining space is an unsustainable mining practice that can have further detrimental effects on future mine plans and ore bodies.
- Among miners Citi sees as most vulnerable to a low gold price environment are Sibanye Gold (NYSE:SBGL), Harmony Gold (NYSE:HMY) and DRDGOLD (NYSE:DRD), which the least vulnerable are Goldcorp (NYSE:GG), Barrick Gold (NYSE:ABX), Yamana (NYSE:AUY), Medusa Mining (OTC:MDSMF) and OceanaGold (OTCPK:OCANF).
- ETFs: GDX, NUGT, DUST, GLDX, RING, GGGG, PSAU
Fri, Jul. 25, 10:58 AM
- AngloGold Ashanti (AU +2.1%) says Q2 profit will be hurt by costs related to the closing of its Yatela mine in Mali and reorganizing operations in Ghana.
- AU also says it will provide for a $51M (537M rand) writedown on its 42.4% stake in Rand Refinery, which processes gold in South Africa.
- Harmony Gold (HMY +1.1%), a partner in Rand, says it will make a 125M rand provision, and Sibanye Gold (SBGL -8.2%), also with an ownership stake in the refinery, will write down 316M rand.
Thu, May. 29, 10:37 AM
- Citigroup is bearish on the gold mining sector but it does prefer some miners to others, namely Buy-rated Goldcorp (GG -0.7%) and Barrick Gold (ABX +0.4%) as well as Neutral-rated Newmont Mining (NEM +0.8%).
- Citi sees GG as one of the few large gold producers set to deliver meaningful low-cost production growth over the next several years, and management continues to expect positive free cash flow beginning in Q4 at $1,200/oz. gold; the firm thinks ABX is in a better position to manage free cash generation after divesting high-cost assets, focusing on cost reductions and dialing back major project spending; NEM expects to generate positive free cash flow in 2014 at $1,250/oz. gold and has done a good job managing costs and dialing back capex.
- The firm slaps Sell ratings on Gold Fields (GFI -0.7%), Harmony Gold (HMY +1.1%) and Sibanye Gold (SBGL +1%).
Mon, Mar. 24, 3:48 PM
- Gold prices tumbled nearly 2% to settle at five-week lows as investors continued to take profits against the metal's YTD surge with an eye toward an improving U.S. economy and the possibility of an interest rate hike as soon as early next year.
- So Credit Suisse's move today to lift stock price targets for Barrick Gold (ABX -4.1%) and Newmont Mining (NEM -2.1%) was ill-timed as gold miners (GDX -4%) fall sharply across the board.
- On ABX, the firm raises its target to $21 to reflect the company's relatively conservative $1,100/oz. gold price assumption for reserves, exploration upside potential within its asset base (demonstrated by its 15M oz. Goldrush discovery) and strong base of low cost assets.
- On NEM, the firm ups its target to $26 on higher forecast operating cash flow and a higher NAV target multiple, but a resolution of the ore export ban in Indonesia is necessary to become more constructive.
- Also: AU -4.3%, NG -4.9%, GG -3.6%, KGC -4%, NGD -4%, IAG -3.8%, GFI -1.9%, HMY -3.2%, SLW -6.5%, ANV -6.7%, BTG -4.9%.
Mon, Mar. 3, 9:55 AM
- Gold futures are surging in the wake of the crisis in Ukraine, and that's giving precious metals miners a big boost in early trading.
- AU +5.2%, GOLD +5%, GFI +4.6%, MUX +4.1%, BVN +3.9%, MVG +3.6%, SSRI +3.3%, IAG +3.2%, BTG +3.1%, HMY +3.1%, EXK +3.1%, ABX +2.8%, AUY +2.8%, SA +2.8%, SLW +2.7%, GG +2.7%, NEM +2.6%, HL +2.6%, KGC +2.3%, AGI +2.2%, AG +1.9%, NG +1.9%, PPP +1.8%, AUQ +1.6%, PAAS +1.2%, NGD +1%.
- ETFs: GDX, GDXJ, NUGT, DUST, SIL, GLDX, JNUG, SLVP, RING, SILJ, GGGG, JDST, PSAU
Fri, Feb. 7, 8:14 AM
- Harmony Gold (HMY) stops production at its South African gold mines after two workers were killed in an accident Thursday, bringing to 10 the total number of deaths at its operations this week.
- The two employees were killed at HMY's Kusasalethu mine when a piece of mining equipment fell; on Tuesday, eight people died after a fire broke out at the Doornkop gold mine which was triggered by an underground tremor.
- HMY -0.7% premarket.
Thu, Feb. 6, 10:22 AM
- Harmony Gold (HMY +1.5%) says eight workers were killed and one is missing after a rockfall triggered a fire more than a mile underground at its Doornkop site in South Africa’s worst gold company accident in more than five years.
- Eight other miners were found unharmed in an underground refuge chamber and brought to the surface.
- An earth tremor appeared to cause the rockfall which triggered the fire; HMY has confirmed there was some seismic activity in the area.
Mon, Feb. 3, 8:31 AM
- Harmony Gold (HMY) reports an unadjusted ~$10M loss in the three months ended Dec. 31 vs. a $2M profit in the previous quarter, as the price of bullion declined and output fell.
- Production fell 1% to ~306M oz. in the quarter from the previous period and the average gold price received declined 4.8% to $1,277/oz.; all-in sustaining costs dropped 3.3% to $1,222/oz.
- HMY -0.3% premarket.
Thu, Jan. 23, 11:43 AM
- South African gold miners are higher - AngloGold Ashanti (AU) +6.3%, Harmony Gold (HMY) +3.2%, Gold Fields (GFI) +2.4%, and Sibanye Gold (SBGL) +2.1% - as they enjoy a reprieve from the start of strikes at the country's platinum mines.
- There was talk of labor strikes in the gold mines too, but the gold miners managed to avert that by challenging the AMCU labor union in court; any potential strike against gold producers is delayed until Jan. 30, and analysts say the union is looking to see how the platinum strikes go before moving forward.
Wed, Jan. 15, 11:24 AM
- Citi expects South African gold miners will have produced ~6% more gold Q/Q in December, mainly due to the inclusion of Gold Fields' (GFI +1.2%) recently acquired Yilgarn assets and the ramp up of AngloGold’s (AU +2.5%) Tropicana and Kibali projects.
- But bearish fundamentals have not changed, Citi says, maintaining its Neutral rating on GFI but Sell ratings on AU, Harmony Gold (HMY +0.3%) and Sibanye Gold (SBGL +3.2%).
- If Citi is right, the South African gold miners will continue to lose their equity value, although perhaps at a slower pace.
Wed, Jan. 15, 8:20 AM
- South African gold miners including AngloGold Ashanti (AU), Harmony Gold (HMY) and Sibanye Gold (SBGL) face strike notices over pay demands, the AMCU union says.
- The gold companies in September reached a wage accord with labor groups except AMCU, the dominant union at the largest mines in the country.
- AMCU says members will strike at Impala Platinum (IMPUY), the world’s second-biggest producer, and meetings will be held at Lonmin (LNMIF) and Anglo American Platinum (AGPPY).
Fri, Jan. 10, 3:49 PM
- Gold futures settle at a four-week high, rising 1.4% to $1,246.90, as the surprisingly weak jobs report reopens debate over the pace of bond buying at the Fed; precious metals miners are far outpacing the broader market, with the top gold miner ETF (GDX) surging 3%.
- Among the top miners: ABX +2.3%, GG +3.3%, NEM +2.4%, AU +3.8%, KGC +1.3%, GFI +4.3%, AUY +2.8%, RGLD +5.3%, AGI +2%, AEM +4.5%, SLW +4.4%, IAG +1.9%, FNV +1.5%, CDE +2.3%, EGO +3.8%, NGD +2.9%, NG +6.9%, HMY +2.7%.
- ETFs: GDXJ, NUGT, DUST, SIL, GLDX, SLVP, RING, GGGG, SILJ, JNUG, PSAU, JDST.
Dec. 19, 2013, 9:58 AM
- Precious metals stocks are slammed at the open from weakening prices for underlying metals, and the Market Vectors Gold Miner ETF (GDX -2.1%) opens at a new 52-week low.
- GFI -2.8%, AUY -2.4%, AU -3.8%, RGLD -2.7%, NEM -3.1%, ABX -2.1%, GG -2.4%, AGI -3.2%, AEM -2.3%, SLW -2.6%, KGC -1.9%, FNV -1.6%, CDE -1.5%, EGO -1.5%, NGD -1.2%, HMY -1.2%.
- ETFs: GDXJ, NUGT, DUST, SIL, GLDX, SLVP, GGGG, RING, SILJ, PSAU, JNUG, JDST.
Dec. 6, 2013, 3:30 AM
- South African markets are calm following the passing of Nelson Mandela, who was instrumental in the country's peaceful transition away from apartheid.
- One of Mandela's biggest achievements was enacting policies that paved the way for GDP to grow for 15 years, the longest period of expansion in South Africa's history. These policies included embracing the free market, cutting costs and attracting foreign investment.
- The question is now that Mandela has passed on, whether South Africa will feel more free to abandon the policies and conciliation that he espoused. For example, the ANC's youth wing wants to nationalize banks and mines, policies that Mandela ditched in 1994.
- There are also fears that Mandela's death could leave South Africa open to renewed racial and social tensions, such as those seen in the mine strikes over the past year or so.
- The economy is already not in a good way: unemployment is 24.7% and there is a large inequality in earnings between blacks and whites.
- The FTSE/JSE Top 40 is +0.3%, the South African 10-year bond yield is -2.5 bps at 8.16%, and the USD-ZAR is +0.2% at 10.4732 rand.
- Tickers: HMY, AGPPY, AGPPF, AAUKY, AAUKF, SSL, GFI, ABX, AU, SBGGF.
- ETF: EZA
Oct. 15, 2013, 2:59 PM
- Harmony Gold (HMY +3.5%) reports total Q3 production is expected to come in ~12% higher than the prior quarter; production at its underground mines in South Africa is ~15% higher Q/Q, while Hidden Valley's production has increased by ~7%.
- HMY says increases in electricity costs and labor costs following a new wage agreement were more than offset by the increased production and savings in overall costs, resulting in cash cost per kilogram 6%-8% lower Q/Q.
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