Gold shares moved higher alongside COMEX gold futures on Friday, with the Market Vectors Gold Miners ETF (GDX) rising 0.7% to $46.59 in mid-day trading. The GDX climbed to an intra-day high of $47.11 this morning but later pared its gains. Still, the GDX remains on pace for only its third weekly advance in the past three months. The yellow metal inched higher by $4.20, or 0.3%, to $1,664.70 per ounce as the U.S. dollar dipped 0.2% against a basket of foreign currencies.
Two of the world’s largest gold producers were in the news this morning after announcing first quarter earnings results yesterday after the markets closed. Agnico-Eagle Mines (AEM.TSX, NYSE: AEM) reported adjusted earnings per share (EPS) of $0.53 – according to Dundee Securities analyst Paul Burchell – which came in well above his $0.41 per share estimate.
Additionally, Burchell noted that Agnico “performed exceptionally well operationally, producing 254,995 oz of gold at total cash costs of US$94/oz…We had anticipated 218,000 oz at total cash costs of US$697/oz.” Dundee Securities also reiterated its Buy rating and C$47.00 price target on AEM.TSX, which surged as much as 11.3% to C$39.24 per share this morning and later traded up by 8.5% at C$38.25.
Newmont Mining (NEM) reported first quarter adjusted EPS of $1.17 – according to Stifel Nicolaus analyst George Topping – above his estimate of $1.16 and the consensus forecast among Wall Street analysts of $1.15 per share. As for production, Topping noted that the 1.3 million ounces of gold was in-line with his forecast.
Stifel Nicolaus maintained its Hold rating on NEM – the firm does not issue price targets on Hold rated stocks – which earlier jumped 2.6% to an intra-day high of $48.97 per share before paring its gains to trade up by 1.0% at $48.20.
Other notable advancers in the gold sector included GDX components Barrick Gold (ABX) and Yamana Gold (AUY). ABX rose by 1.1% to $40.39 and AUY by 1.1% to $14.75 per share in mid-day trading.
Extorre Gold Mines Comments on YPF Situation in Argentina
The emerging gold company went on to say that the Argentinean Government initiative presently being discussed before Congress has been enacted only in connection with YPF which has a long Argentinean history. Extorre noted that YPF was State owned from its inception in the early 1920’s until the late 1990’s, when it was privatized and a majority stake sold to Repsol. The current re-nationalization process of YPF has not been extended to other oil & gas companies operating in Argentina. Full Extorre Gold Mines Press Release.
- There is no reported agenda in the popular press or, to Extorre’s knowledge, to extend the nationalization process to any other company in the oil and gas sector in Argentina or to any other sector of the economy
- The mining sector has also received explicit public support from the Provinces and the Federal Government
- Many other mining companies operating in Argentina have publicly commented on this situation in similar terms to Extorre's view
- Very recent discussions with potential financiers to provide capital for the potential development of Extorre’s Cerro Moro project have indicated that the YPF action has not materially impacted the finance ability of the project