Citi: Many Gold-Mining Companies Losing Money Despite Cutting Costs-Shanghai Metals Market

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Citi: Many Gold-Mining Companies Losing Money Despite Cutting Costs

Industry News 03:55:05PM Sep 18, 2015 Source:SMM

By  Paul Ploumis 18 Sep 2015  Last updated at 02:31:21 GMT

Citi Research finds that nearly 50% of the global gold firms has turned cash-negative in June this year when compared to three months before.

SEATTLE (Scrap Monster): Citi Research remains downbeat on the gold-mining sector. Companies have cut costs and got help when local currencies weakened against the U.S. dollar, Citi says.

Still, the bank estimates that roughly 50% of gold companies were cash negative during June, compared to 40% in March.

“This is as gold has fallen a further 2% from Mar-15’s average of $1,218/oz to $1,193/oz during Jun-15,” Citi says.

“We maintain our thesis that further cost-cutting and high-grading to improve margins will have long-term detrimental effects. We continue to caution that a slowdown in capex will result in a fall in production in the long term. We maintain our bearish view on the sector.”

Courtesy: Kitco News


Key Words:  Gold-Mining Companies    
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Citi: Many Gold-Mining Companies Losing Money Despite Cutting Costs

Industry News 03:55:05PM Sep 18, 2015 Source:SMM

By  Paul Ploumis 18 Sep 2015  Last updated at 02:31:21 GMT

Citi Research finds that nearly 50% of the global gold firms has turned cash-negative in June this year when compared to three months before.

SEATTLE (Scrap Monster): Citi Research remains downbeat on the gold-mining sector. Companies have cut costs and got help when local currencies weakened against the U.S. dollar, Citi says.

Still, the bank estimates that roughly 50% of gold companies were cash negative during June, compared to 40% in March.

“This is as gold has fallen a further 2% from Mar-15’s average of $1,218/oz to $1,193/oz during Jun-15,” Citi says.

“We maintain our thesis that further cost-cutting and high-grading to improve margins will have long-term detrimental effects. We continue to caution that a slowdown in capex will result in a fall in production in the long term. We maintain our bearish view on the sector.”

Courtesy: Kitco News


Key Words:  Gold-Mining Companies