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Gold earnings preview: Big day is Feb. 21
as Barrick, Newmont, Goldcorp and Kinross all report

Posted: February 05, 2008, 8:54 AM by Jonathan Ratner
Mining
With gold prices finishing 2007 at US$834 per ounce, up 12% in the fourth quarter and averaging US$789, investors are eager to see what fourth quarter and annual earnings will look like from North American producers. The results begin to flow this week, but the day to watch is February 21, when the four biggest names in the business report: Barrick Gold Corp., Newmont Mining Corp., Goldcorp Inc. and Kinross Gold Corp.

Meanwhile, Agnico-Eagle Mines Ltd., which is set to report on the 20th, is one of several names that will be affected by increased Canadian dollar costs, Credit Suisse analyst Anita Soni told clients in a note. She pointed out that the loonie appreciated by 7% relative to the U.S. dollar. The Euro rose 5% and the Brazilian Real climbed 7% versus the greenback, respectively.

Other names she expects will be impacted are Northgate Minerals Corp. and Goldcorp given their significant Canadian production. Yamana Gold Inc. will be the most impacted by the Real’s appreciation since it has more than 90% of current production in Brazil, Ms. Soni added.

Her price target for Agnico is $70, Barrick is at US$59, and Goldcorp at $44 – all rated “outperform.” Kinross is rated “neutral” with a $23 price target, as is Golden Star Resources Ltd. with a $4.50 target and Eldorado Gold Corp. at $7.50.

Ms. Soni rates both Northgate and Yamana at “outperform” with target prices of $4.40 and $19, respectively.

Credit Suisse believes gold will continue its ascent in 2008 and remain in sight of the US$1000 per ounce mark due to weakness for the U.S. economy and continued investment demand. Ms. Soni also believes central bank sales of gold will be light in the first half of 2008.

The firm recently boosted its gold price forecasts for 2008 to 2012 to to US$950, US$1,035, US$1,068, US$1,117 and US$1,145 per ounce from US$700, US$750, US$650, US$600 and US$600, respectively.

Jonathan Ratner

http://network.nationalpost.com/np/blogs/tradingdesk/archive/2008/02/05/gold-earnings-preview-big-day-is-feb-21-as-barrick-newmont-goldcorp-and-kinross-all-report.aspx