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Strategies & Market Trends : Dino's Bar & Grill -- Ignore unavailable to you. Want to Upgrade?

To: Goose94 who wrote (993)	4/17/2013 10:10:01 AM
From: Goose94	Read Replies (1) \| Respond to of 202718

So much for the relief rally. Canaccord Genuity Precious Metals Analyst Steven Butler published a report on Monday, "Balance Sheet Analysis: Who Holds Up At Current Low Spot Prices." With gold's historic selloff, Butler highlights at the prevailing low spot prices ($1,375 Au, $23.50 Ag and $2.25 Cu), most producers will be faced with cash shortfalls in the 2013- 2016 period, which may necessitate debt refinancings, drawdown of unused credit facilities, project deferrals and/or potential dividend cuts. All-in sustaining costs for the sector are approaching $1,100-$1,200/oz and the “breakeven” gold price for new production would be closer to $1,400-$1,500/oz. In particular, under the spot price scenario. Butler highlights Barrick Gold with a $4.3 billion shortfall in Q2/15 which would necessitate debt refinancing, tapping $3 billion of unused credit capacity and/or reducing the current annual dividend ($800 million); Kinross Gold with a $1 billion shortfall by Q2/16 which could require using credit facility to repay $1 billion term loan due August 2015 and deferring capex at Tasiast; Agnico-Eagle with a $780 million shortfall by Q4/16 which would necessitate drawing on available credit ($1.17 billion) and/or deferring the Meliadine project or Kittila expansion or reducing the current annual dividend ($150 million); and IAMGOLD with a $430 million shortfall by Q4/16 which would necessitate deferring the Niobec block-cave expansion and and/or reducing the current annual dividend (~$95 million). On the positive side, companies that are more defensive due to lower NAV sensitivity and/or better balance sheet positioning include: Goldcorp (G), Eldorado Gold (ELD), Yamana Gold (YRI), AuRico Gold (AUQ), B2Gold (BTO), Nevsun (NSU), New Gold (NGD), Primero Mining (P) Pan American Silver (PAA).