gold prices

Detour Gold, $10.17, symbol DGC on Toronto (Shares outstanding: 117.9 million; Market cap: $1.2 billion; www.detourgold.com), has finished building its Detour Lake mine in northeastern Ontario and aims have the project operating at full production in the third quarter of this year. The company estimates that the mine will produce 171,000 ounces of gold this year. It forecasts cash flow per share of $0.67 in 2013. In 2014, with the mine at full operating capacity, output will likely exceed 574,000 ounces. That should generate cash flow of as much as $4.49 per share....

Most gold stocks have moved down lately, along with gold prices. (Gold is down from almost $1,800 U.S. an ounce in September 2012 to $1,370 today.)

Gold’s most recent drop came in response to concerns that Cyprus may sell some of its gold reserves as it deals with its financial crisis....

NEW GOLD $6.89 (Toronto symbol NGD; TSINetwork Rating: Speculative) (888-315-9715; www.newgold- .com; Shares outstanding: 476.9 million; Market cap: $3.2 billion; No dividends paid) has four operating mines: the Mesquite mine in the U.S., the Cerro San Pedro mine in Mexico, the Peak mine in Australia and the just-completed New Afton mine in B.C. It also owns 30% of the El Morro copper/gold project in Chile and 100% of the Blackwater project in B.C.

In the quarter ended March 31, 2013, New Gold’s cash flow fell 5.6%, to $0.17 a share from $0.18 a year earlier. Lower gold prices offset new production from New Afton, which started up in late 2012.

New Gold’s $854.3 million of long-term debt is a moderate 26.7% of its market cap. It also holds cash of $672.4 million, or $1.41 a share.
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IAMGOLD $5.23 (Toronto symbol IMG; TSINetwork Rating: Speculative) (1-888-464-9999; www.iamgold- .com; Shares outstanding: 376.6 million; Market cap: $1.9 billion; Dividend yield: 4.7%) owns 38% of the Sadiola mine and 40% of the Yatela mine, both located in Mali; 90% of its new Essakane gold mine in Burkina Faso; 100% of the Doyon mine in Quebec; and 100% of the Rosebel mine in Suriname, South America.

IAMGold also has a 1% royalty interest in the Diavik diamond mine in the Northwest Territories. As well, it owns the Niobec niobium mine in Quebec. When used as an additive, niobium makes steel stronger, more heat resistant and easier to weld.

In the three months ended March 31, 2013, IAMGold’s revenue fell 13.8%, to $305.3 million from $354.l million a year earlier. Cash flow per share fell 35.4%, to $0.49 from $0.57. The declines mostly resulted from lower gold prices, partly offset by a decline in the company’s costs.
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NEWMONT MINING $32.59 (New York symbol NEM; Shares outstanding: 491.8 million; Market cap: $16.0 billion; TSINetwork Rating: Average; Dividend yield: 4.3%; www.newmont.com) gets 90% of its revenue from gold mines in the U.S., Australia and Peru. Copper, zinc and other metals supply the remaining 10%.

Newmont produced 1.2 million ounces of gold in the first quarter of 2013, down 10.9% from a year earlier....

Barrick Gold, $19.02, symbol ABX on Toronto (Shares outstanding: 1.0 billion; Market cap: $19.5 billion; www.barrick.com), has moved down along with gold prices. Gold has fallen from almost $1,800 U.S. an ounce in September 2012 to $1,470 U.S. today; Barrick’s share price is down from just over $55 in that same period. The company is now considering selling some of its less important gold assets, including three mines that make up its Yilgarn South Division in Australia. These projects could be worth at least $600 million U.S. Barrick is also taking a close look at all of its current assets and could sell some that are currently underperforming. That may include its Barrick Energy division, which it entered into as a hedge against rising oil prices but hasn’t performed as well as expected....

NEWMONT MINING CORP. $34 (New York symbol NEM; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 496.8 million; Market cap: $16.9 billion; Price-to-sales ratio: 1.6; Dividend yield: 5.0%; TSINetwork Rating: Average; www.newmont.com) produced 1.2 million ounces of gold in the first quarter of 2013, down 10.9% from a year earlier....

INTERNATIONAL BUSINESS MACHINES CORP., $190.00, New York symbol IBM, reported lower-than-expected earnings and revenue for the latest quarter. That’s why the stock fell 8% on Friday. In the three months ended March 31, 2013, the company earned $3.03 billion. That’s down 1.1% from $3.07 billion a year earlier. IBM spent $2.6 billion on share buybacks in the latest quarter. Due to fewer shares outstanding, earnings per share rose 3.4%, to $2.70 from $2.61. Without unusual items, such as costs to integrate recently purchased companies, IBM’s earnings per share would have risen 7.9%, to $3.00 from $2.78. The gain was mainly the result of the company’s ongoing efforts to cut costs and improve productivity. Still, the latest earnings missed the consensus estimate of $3.05 a share....

YAMANA GOLD INC., $11.81, symbol YRI on Toronto, owns seven operating gold mines in Brazil, Chile, Mexico and Argentina. It also holds a 12.5% stake in the Alumbrera copper/gold project in Argentina and has three other properties in advanced stages of development. The stock fell 11% this week in response to concerns that Cyprus may sell some of its gold reserves as it deals with its financial crisis. Investors, who typically buy gold as a hedge against inflation, are also worried that the U.S. Federal Reserve may scale back its quantitative easing policy, which would slow inflation. As a result, gold prices fell from around $1,500 U.S. an ounce to today’s price of $1,401. We feel Yamama’s high-quality mines give it an edge over other junior gold companies. It also plans to increase its production by at least 20% in 2013. Moreover, Yamana’s strong balance sheet is a plus: its debt of $765.9 million (as of December 31, 2012) is a low 8.6% of its $8.9-billion market cap. The company also held cash of $349.6 million, or $0.46 a share....

NEWMONT MINING CORP. $34 (New York symbol NEM; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 496.8 million; Market cap: $16.9 billion; Price-to-sales ratio: 1.6; Dividend yield: 5.0%; TSINetwork Rating: Average; www.newmont.com) produced 1.2 million ounces of gold in the first quarter of 2013, down 10.9% from a year earlier. That’s because colder-than-normal winter weather hurt production at its mine in Nevada. However, it still expects to produce 4.8 million to 5.1 million ounces in 2013.

Newmont remains our top gold stock. Its reserves should last decades, and most of its production is in politically stable areas. However, gold prices have fallen in the last six months and could remain under pressure, particularly if European governments sell their gold reserves to deal with their financial problems.

Newmont is now a hold....