Wednesday, April 29, 2009
Barrick Beats Expectations, Cortez Hills on Schedule
It is 6:30 am and a good day for Barrick. As promised, this report will highlight their earnings report and live Webcast. You can access both by clicking the Barrick link in the "Miner's Corner" to your right.
Barrick beat Wall Street expectations for the first quarter of this year reporting $0.42 earnings per share (EPS) versus a predicted $0.36. The ole Colonel thinks that’s pretty darn good on a morning when the government reported a whooping 6.1% contraction in our Gross Domestic Product (GDP) for the same quarter!
[Correction (5/1/2009): The ole Colonel in the heat of battle mistook $0.42 net income for earnings. The reported earnings per share was $0.34, slightly below the mean analyst projection. Not to worry, the response to Barrick's earnings report was still very positive, Credit Suisse set a 12-month target price at $40 with a sector outperform rating on 4/30/2009.]
The good news was rewarded by a 2% pop in stock price (ABX) in early trading.
In Nevada, Cortez Hills remains on schedule for first production in Q1 2010 assuming the satisfactory resolution of the pending litigation regarding the project and is in line with its capital budget of $500 million. The Cortez property is expected to materially benefit 2010 production, becoming another one million ounce producer for Barrick at total cash costs of $350-$400 per ounce in its first full five years once Cortez Hills comes on line.
Here's a quick summary of their overall performance:
Gold production (thousands of ounces) 1,755 (2008) 1,743 (2009)
Gold sold (thousands of ounces) 1,714 (2008) 1,729 (2009)
Average realized gold price (per oz.) $912 (2008) $925 (2009)
Total production costs (per oz.) $595 (2008) $501 (2009)
Yearly production is expected to increase to approximately 7.7-8.1 million ounces in 2010 at lower total cash costs with the start-up of Cortez Hills scheduled in the first quarter.
The Webcast mentioned the importance of gold investor participation in Exchange Traded Funds (ETF), a common theme of the Eureka Miner's Report. How about a Colonel Yee-ha for Barrick!
Here's a daily reminder of the first quarter conference calls for the big mines in our area:
Barrick (ABX) This report
Newmont (NEM) Tomorrow, Thursday, 4/30 10:00am (ET)
General Moly (GMO) not scheduled
Enough talk, let's walk the walk:
Oil jumped $1.05 in early trading to $50.97(June contract). The dollar ("Dixie" or .DXY) has pulled back 0.78% to 84.507. The commodity index (.CRB) is up 1.03% to 219.45.
Gold is up $3.4 to $897.0 (June contract); Silver is up $.209 to $12.635; Copper is up $.595 to $1.9760 (most-active, July contract); Molybdenum is still asleep below $8.
The DOW is up a healthy 140 points to 8,157.29; the S&P 500, up 16.02 points to 871.18 testing a critical resistance level of 870. Miners are rocking the clock, buckaroos:
Barrick (ABX) $29.64 up 2.31%
Newmont (NEM) $40.54 up 1.30%
General Moly (GMO) $1.45 up 2.84%
Freeport McMoran (FCX) $40.29 up 5.28% (a bellwether mining stock spanning gold, copper & molybdenum)
Steel stocks are mixed (a "tell" for General Moly):
Nucor (NUE) $38.53 up 2.75% - domestic steel manufacturing
ArcelorMittal (MT) $23.40 down 2.74% - global steel producer