By Paul Ploumis 10 Aug 2015 Last updated at 04:07:22 GMT
(Kitco News) - Stocks of gold- and silver-mining companies traded in North America mostly lost ground during the first four trading days of this week as gold also continued its slide, although less dramatically than last month.
Additionally, many were impacted by earnings reports for the second quarter – with stocks of some companies outperforming the metals and others underperforming.
As of Thursday’s close, Comex December gold futures were slightly lower – just 0.4% --since last Friday’s close. The contract’s official close Thursday was $1,090.10 an ounce, a loss for the week of $5.
During that same time span, the NYSE Arca Gold Bugs index (HUI) was down 4.2924 points, or 3.8%, to 107.4390. The Market Vectors Gold Miners exchange-traded fund (GDX), which consists of stocks of gold-mining companies, fell 38 cents to $13.37, a decline of 2.8%.
Barrick Gold Corp., the world’s largest gold producer, was among the companies reporting second-quarter earnings this week. The company’s shares (NYSE: ABX) lost 18 cents, or 2.5%, through Thursday’s close, although this means they held up better than the December gold futures.
Barrick reported that adjusted second-quarter net earnings were $60 million, or a nickel per share, compared to $159 million, or 14 cents, in the same period a year ago. During a conference call with investors and analysts, company officials emphasized their efforts at cost cutting and reducing debt, including a $1 billion sale of half of its Zaldívar copper mine in Chile to copper-mining giant Antofagasta Plc., announced last week. This week, Barrick said it entered into a streaming agreement with a subsidiary of Royal Gold, Inc. for production linked to Barrick's 60% interest in the Pueblo Viejo mine in the Dominican Republic. Barrick also trimmed its dividend.
The other major North American gold-mining company reporting this week, Iamgold (NYSE: IAG), lost 3 cents, or 2%. The company reported an adjusted net loss of $30.8 million, or 8 cents per share, for the last three months, down from earnings of $8.8 million, or 2 cents, in the same period in 2014. Officials blamed lower prices of metals, since production rose and the all-in sustaining cost fell.
Coeur Mining, Inc. (NYSE: CDE) was one of the hardest-hit companies in a week during which the top-10 global silver producer reported earnings. Shares fell 60 cents, or 17%, through Thursday’s close. The company reported an adjusted loss for the April-June period of $14.5 million, or 11 cents per share, compared to $21.5 million, or 21 cents, a year ago.
New Gold Inc. (NYSE: NGD) fell 27 cents, or 12%. The company last week reported a decline in second-quarter profit and lower gold production. At the time, New Gold also said its Rainy River project in Ontario is on schedule for first production in the middle of 2017
Gold Fields Ltd. (NYSE: GFI) slid 30 cents, or 11%. Company officials were quoted this week as saying the South African gold miner will continue its exploration spending program in Australia over the next few years and remains committed to the Darlot project, despite media reports that it was shopping the asset. The company is scheduled to report its earnings on Aug. 20.
Sibanye Gold Ltd. (NYSE: SBGL) declined 49 cents, or 9%. South Africa’s largest gold producer reported that earnings, excluding special items, slid to $14.3 million in the six months to June 30, versus $61.2 million in the same period last year. Output was hurt by electricity constraints.
Shares of Hecla Mining Co. (NYSE: HL) lost 19 cents, or 9%. The largest U.S. primary silver producer appeared to be just one of many companies hurt by falling prices of precious metals, with an adjusted net loss of $17.6 million, or 5 cents per share, Also, silver output was slightly lower than in the same quarter a year ago after failure of a ventilation booster fan at the Lucky Friday Mine in Idaho.
Gold Resource Corp. (NYSE: GORO) was among the winners this week, adding 17 cents, or 7%. The company reported operating income of $1.6 million in the second quarter, with a 3-cent-per-share dividend. Output was 14,858 gold-equivalent ounces. The company said production was weaker than expected due to factors such as water issues and a mine protest and work stoppage, but says the challenges should now “behind us.”
Richmont Mines (TSX: RIC) added 26 cents, or 8%. The company reported record quarterly revenues in the second quarter and increased its guidance for production in 2015. Second-quarter net earnings totaled C$2.9 million, or 5 cents per share, although this was down from C$4.7 million, or 10 cents, in the second quarter of 2014. Second-quarter gold production was 26,314 ounces, including record output of 14,997 ounces at the Island Gold Mine. Annual gold production guidance for 2015 was increased to between 87,000 and 95,000 ounces from 78,000 to 88,000 ounces previously.
Guyana Goldfields Inc (TSX: GUY) climbed 20 cents, or 5.5%. Guyana reported that first gold production was achieved on time and on budget at its Aurora Gold Mine in Guyana. The company expects to produce between 30,000 ounces to 50,000 ounces of gold in 2015, depending on how quickly full ramp-up is achieved, and approximately 120,000 ounces to 140,000 ounces in 2016. The company also says it is sufficiently funded to complete construction of the mine.
SEMAFCO Inc. (TSX: SMF) tacked on 15 cents, or 5%. The company reported a rise in second-quarter profit as its per-ounce costs declined. Adjusted net income from continuing operations was $15.6 million or 5 cents per share, compared to $13.3 million, also 5 cents, for the same period in 2014. SEMAFCO also lowered its cost guidance for 2015.
Primero Mining Corp. (NYSE: PPP) gained 13 cents, or 5%. The company reported that it can resume selling silver now that its Mexican import and export permits were reinstated. Last month, officials announced a delay in silver revenue after permits were suspended in a snafu relating to relocation of corporate offices. Otherwise, Primero reported adjusted net income of $1.1 million, or a penny per share, in the April-June period. Gold and silver production increased to 54,862 ounces and 2.15 million ounces, respectively, in the second quarter from 50,061 ounces and 1.49 million ounces in the same period a year ago.
Courtesy: Kitco News