gold prices

Detour Gold Corp., $10.62, symbol DGC on Toronto (Shares outstanding: 156.8 million; Market cap: $1.7 billion; www.detourgold.com), has finished building its Detour Lake mine in northeastern Ontario. It’s now close to full production. The company reports that the mine produced 232,287 ounces of gold in 2013. In 2014, with the project at full capacity, its output will likely range between 440,000 and 500,000 ounces. That should generate cash flow as high as $0.98 a share this year. Over the mine’s 21.5-year life, the company expects its annual production to average 660,000 ounces annually....

AuRico Gold, $5.24, symbol AUQ on Toronto (Shares outstanding: 247.1 million; Market cap: $1.3 billion; www.auricogold.com), operates the El Chanate gold mine in Mexico, which produced 71,864 ounces in 2013. The company’s Young-Davidson gold mine in Northern Ontario reached full production in 2013, with total output of 120,738 ounces. AuRico hasn’t yet released its financial results for 2013, but in the three months ended September 30, 2013, revenue rose 36.5%, to $54.3 million from $39.8 million. Cash flow jumped, to $0.09 a share from nil per share a year earlier. Higher gold production offset lower gold prices....

BMO Low Volatility Canadian Equity ETF, $20.48, symbol ZLB on Toronto (Units outstanding: 7.9 million; Market cap: $161.8 million; www.etfs.bmo.com), aims to invest in a portfolio of low-beta Canadian stocks. The ETF selects the 40 lowest-beta stocks from the 100 largest, most liquid securities in Canada. The underlying portfolio is rebalanced in June and reconstituted in December. Beta is a commonly used measure of volatility. To calculate a stock’s beta, an index like the S&P/TSX Composite Index is assigned a beta of 1.0. The historical volatility of different stocks relative to the index is then measured using either a 36-month or 60-month regression analysis....

Goldcorp, $22.94, symbol G on Toronto (Shares outstanding: 812.0 million; Market cap: $18.0 billion; www.goldcorp.com), is a senior gold producer with 12 operating mines and several development projects. It mainly focuses on places with little political risk, such as Canada and Mexico. In the three months ended September 30, 2013, Goldcorp’s revenue fell 27.5%, to $929.0 million from $1.3 billion a year earlier. (All figures except share price and market cap in U.S. dollars.) Cash flow per share fell 30.1%, to $0.51 from $0.73. Gold production rose 7.5% in the latest quarter, to 637,100 ounces from 592,500 ounces. But the average realized gold prices fell 20.5%, to $1,339 U.S. per ounce from $1,685. That pushed down revenue and cash flow....

AMAZON.COM $395.96 (Nasdaq symbol AMZN; TSINetwork Rating: Extra Risk) (206-266-1000; www.amazon.com; Shares outstanding: 457.7 million; Market cap: $177.4 billion; No dividends paid) has expanded its AmazonFresh same-day grocery delivery service to San Francisco....

Moneta Porcupine Mines, $0.07, symbol ME on Toronto (Shares outstanding: 193.6 million; Market cap: $13.6 million; www.monetaporcupine.com), owns 100% of five projects along the Destor Porcupine Fault Zone in northern Ontario’s Timmins Camp. The properties have road access and are near mills and power and water sources. A preliminary economic assessment on the Golden Highway project included a gold deposit that could hold as much as 3.8 million ounces in three zones: Windjammer, Southwest and 55. The assessment projects a mine producing an average of 288,000 ounces of gold annually for 12 years. The company’s properties are still in the very early stages, but it does holds cash of $4.7 million. That should let it continue its exploration and development....

AMAZON.COM INC., $384.24, symbol AMZN on Nasdaq, has expanded its AmazonFresh same-day grocery delivery service to San Francisco. The move follows the launch of the service in Los Angeles in June 2013. AmazonFresh has also been available in the company’s hometown of Seattle for some time. AmazonFresh promises same-day or early morning delivery of over 500,000 items, including groceries and food from specialty shops. Delivery is free on orders over $35 if the customer pays a yearly $299 subscription fee. The fee also includes the benefits of Amazon’s Prime service, such as free two-day shipping on most other products sold on Amazon.com. AmazonFresh may help the company achieve its goal of same-day delivery of all its products. In addition to groceries, AmazonFresh trucks will deliver a range of toys, electronics and household goods. Eventually, they could let the company ship to customers directly and do away with the services of UPS or FedEx in many markets. The trucks could also let Amazon pick up returns from customers, again cutting out the courier companies and speeding up service....

Gold has dropped over 30% from its high near $1,800 U.S. an ounce in September 2012 to $1,228 today. That’s partly because the U.S. Federal Reserve has indicated that it is likely to scale back its bond-purchasing program, known as quantitative easing. Slowing down the growth in the money supply will reduce the likelihood of a sharp increase of future inflation. Since many investors buy gold as a hedge against inflation, its price has weakened. The best way for aggressive investors to invest in gold is to buy shares of companies with rising production that will give them steady cash flow even if gold prices fall further. Here is our assessment of one of the gold stocks we cover for Stock Pickers Digest....

IAMGOLD $3.55 (Toronto symbol IMG; TSINetwork Rating: Speculative) (1-888-464-9999; www.iamgold.com; Shares outstanding: 376.6 million; Market cap: $1.4 billion; No dividends paid) is suspending its dividend payments to conserve cash while it waits for gold prices to rebound. The move follows similar cuts by other gold miners.

Gold has dropped over 30%, from its high near $1,800 U.S. an ounce in September 2012 to $1,232 today.

IAMGold is still a buy for exposure to a rebound in gold prices....

AASTRA TECHNOLOGIES, $36.16, symbol AAH on Toronto, jumped over 29% this week after the company said it has agreed to a friendly takeover offer from Mitel Networks (symbol MNW on Toronto). Mitel is offering $6.52 U.S. in cash and 3.6 Mitel common shares for each share of Aastra. Based on today’s price for Mitel stock, the offer is worth $37.16 per Aastra share. Aastra develops and markets products and systems for accessing communication networks, including the Internet. Its technology is centred around business telephone systems and includes products that integrate land lines and mobile phones....