Snags at year-end for gold miners

As they release their year-end numbers, Canadian gold miners are for the most part taking advantage of the strong gold price. The average price per ounce in 2011 was $1,571.52 allowing records to be set for revenues, ounces produced, cash flows and earnings.

That doesn’t mean everything was smooth sailing. Cash costs per ounce are rising for many gold miners. Quickly, they look like so:

• Agnico-Eagle        $580/oz           up 29%
• Barrick Gold          $460/oz           up 0.1%
• Goldcorp                $223/oz           down 19%
• Kinross Gold         $596/oz           up 18%

The sharp rise in cash costs at Agnico-Eagle is blamed largely on the Meadowbank mine near Baker Lake, NU. In response the company has revised the mining plan and took a partial write-down ($907.7 million) on the value. This is bad news for a company that earlier last year was forced to close the Goldex mine at Val d’Or, QC, due to ground problems. The write-down for Goldex was $302.9 million. The company has announced the departure of COO Ebe Scherkus after 26 years, hopefully not as a result of the write-downs. (Agnico-Eagle.com)

Agnico-Eagle did set a number of records in for 2011 including one for operating cash flows. They was up 46% year over year to $663.5 million in 2011 compared to $283.5 million in 2010. Gold produced last  year was 996,060 oz, up from 973,056 oz in 2010. The company recorded revenues from mining operations of $1.8 billion in 2011, compared to $1.4 billion the previous year.

Barrick Gold, the world’s largest gold miner, produced 7.68 million oz of gold in 2011 and 450 million lb of copper, resulting in total revenues of $14.3 billion last year, up 39% from $11.0 billion in 2010. Adjusted net earnings rose 33% to $4.7 billion. Operating cash flow rose 8% to $5.7 billion, and net earnings rose 25% to $4.5 billion. (Barrick.com)

Revenues  at Goldcorp increased 43% to a record $5.4 billion in 2011. The company produced approximately 2.45 million oz of gold, and is planning a slight rise to 2.6 million oz in 2012. Adjusted net earnings were $1.8 billion, up 70% in 2011 compared to 2010. A record was also set for operating cash flows before working capital changes at $2.7 billion. (Goldcorp.com)

Kinross Gold is going full steam ahead with record production, revenue, margins and cash flow for 2011. Production was 2.6 million oz AuEq, a 12% boost from 2010. Annual revenue was $3.9 million, a 31% increase. Cash flow for 2011 was $1.6 billion, up 45%. Adjusted  net earning were  $871.8 million, up 79% from a year earlier. (Kinross.com)

We look forward to what 2012 might bring to these gold miners. Already this year the average price of gold is up 7% over last year. And there is a rising trend. The close on Feb. 16 was $1,713.00 after beginning the year at $1,598.00. There may be many more records on the way.