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February 02, 2009 |
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Metal prices may have seen across-the-board declines in the fourth quarter, but gold held up the best. Bullion saw an 8% quarter-over-quarter decline, but silver, copper and zinc fell 32%, 48% and 32%, respectively.
The declining price for gold impacts a wide range of names but companies that will feel the earnings pinch include copper producers Yamana Gold Inc. (AUY), Northgate Minerals Corp. (NXG), Goldcorp Inc. (GG) and Barrick Gold Corp. (ABX), according to Credit Suisse analyst Anita Soni.
And for those that produce copper in a concentrate and price as of the end of the quarter, there is the extra kicker of an end-of-quarter price of $1.33 per pound versus the quarterly average of $1.79, she told clients.
The analyst expects Agnico (AEM) will be negatively affected by the 32% decline in zinc prices. Meanwhile, Kinross Gold Corp. (KGC), Gammon Gold Inc. (GRS) and Yamana will be impacted by the sharp decline in silver, as will other companies that report gold equivalent ounces.
Earnings season for North American gold producers kicks off with Kinross and Agnico-Eagle Mines Ltd. on Wednesday February 18. Ms. Soni said this will be a critical week as Eldorado Gold Corp. (EGO), Goldcorp and Barrick also report at the end of the week.
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