GOLD STOCK NEWS - Gold stocks, as measured by the Market Vectors Gold Mining ETF (GDX), rallied $0.11 to $45.17 in mid-day trading as shares of a number of gold mining companies based in Canada climbed in spite of yesterday’s Federal Reserve’s decision to raise the discount rate. With today’s advance the GDX has moved higher by 2.7% on the week as gold stocks digested a bevy of earnings reports from many of the world’s leading gold mining companies. Two notable reports came from Canadian-based Agnico-Eagle Mines (AEM) and Kinross Gold (KGC) - two of the larger components of the GDX.
Agnico-Eagle Mines announced that its fourth quarter 2009 profit more than doubled as the gold price soared to a new all-time high. The Canadian gold miner reported earnings of $47.9 million, or $0.31 per share - better than the $0.26 per share expected by analysts and the $0.15 per share earned in the fourth quarter of 2008. Gold production increased 82% over the comparable quarter in 2008, to a quarterly record of 163,276 ounces as Agnico-Eagle opened three new mines in Finland, Mexico, and Quebec, Canada. Over the past two years the company has opened four gold mines, while it expects to begin gold production at its Meadowbank mine in Nunavut, Canada during the current quarter of 2010.
Kinross Gold (KGC) reported that fourth quarter 2009 gold production came in at a quarterly record of 613,858 ounces, a 12% rise over the comparable period in 2008. Full-year 2009 gold production was 2,238,665 ounces, a 22% increase over 2008 and in-line with the company’s previously-released forecast. Meanwhile, reported net earnings for the fourth quarter of 2009 were $0.34 per share, versus a net loss of $1.47 per share in the last quarter of 2008. The Canadian-based gold miner also announced the sale of one-half of its 50% interest in the Cerro Casale project in Chile for $475 million to Barrick Gold (ABX) - also based in Canada and the largest component of the GDX.
Gold stocks benefitted from the tailwind of a higher gold price - as gold averaged $1,101 per ounce versus $960 in the third quarter - which bolstered fourth quarter earnings figures. Investors are still awaiting earnings numbers from other large gold miners, such as Newmont Mining (NEM), which reports on February 25th and comprises 10.3% of the GDX. Gold production and earnings figures from small- and mid-cap gold stocks will be released over the next month, with Alamos Gold on March 16, Aurizon Mines (AZK) on March 18, and San Gold (SGR.TSXV) on March 30.
