Gold price dive drags down mining stocks
The gold price fell by as much as $36 in morning trade on Friday crashing through the $1,300 an ounce level to a three-month low.
Friday’s renewed downshift in the gold market comes after safe haven buyers abandoned the metal over hopes the crisis in Washington is closer to being resolved.
The gold price is down more than 23% this year and the metal appears to be firmly in the grip of the bears causing mayhem among gold mining stocks.
In morning trade Barrick Gold Corp (TSX:ABX) lost 3.6% falling, off 21-year lows struck in June, but still down more than 48% so far this year.
Barrick is now worth $17.9 billion on the TSX, nowhere near its market capitalization just two years ago of more than $54 billion despite an aggressive divestment and cost-cutting drive to please investors.
Newmont Mining Corp (NYSE:NEM) with a market value of $12.8 billion, down from $30 billion last year, shed 2.7%.
The Denver-based company, the number two gold producer in terms of annual output of 4.8m to 5.1m ounces forecast this year, last month announced that it is revamping its operations amid the fall in the price of gold, and is looking at adding copper assets to its portfolio.
The world’s third largest gold producer behind Newmont, AngloGold Ashanti (NYSE:AU) came off lightly on Friday, shedding 1.4% of its value.
AngloGold, like its peers, have had to write down billions of dollars this year and the counter is among the worst performing stocks this year. The Johannesburg-based company’s ADRs listed in New York are down 56% year to date as it struggles with unrest in the its home country’s mining sector and falling gold output.
Fellow South African miner Gold Fields (NYSE:GFI) fared worse, losing 3.6% in New York. The world’s fourth largest gold producer has had its value slashed 65% in 2013 with investors punishing it for its contrarian purchase of high-cost mines amid the slump.
Gold Fields acquisition of three Barrick gold mines in Australia will add more than 400,000 to its annual output, putting it within range of the mined ounces of Canada’s Goldcorp (TSX:G) which expects to produce between 2.5 million and 2.8 million ounces in 2013.
Vancouver-based Goldcorp (TSX:G) and Toronto’s Kinross Gold (TSX:K) – which has been narrowing the production gap with Goldcorp lost 3.2% and 1.6% respectively.
Goldcorp’s market value peaked in 2011 at $30 billion and thanks to a relatively robust share price amid the general carnage – year to date losses are ‘only’ 33% – the Vancouver-based company is the most valuable gold stock.
Kinross, like all the majors, took multi-billion charges against the value of its operations with the firm writing down its ill-fated acquisition in Mauritania and abandoning a huge project in Ecuador. At a market cap of $5.5 billion Kinross is worth 50% less than at the start of the year.
Australia’s Newcrest Mining’s (ASX:NCM) declined 1.3% on the Sydney bourse and the stock is now down 54% year to date.
The Melbourne-based company this week ousted its CEO and Chairman after its August results showed a A$5.6 billion loss.
Canada’s Yamana Gold (TSX:YRI) lost 3.2%, while Agnico Eagle Mines (TSX:AEM) escaped some of the carnage, giving up 1.1%, while Eldorado Gold Corp (TSX:ELD) declined 3%.