gold prices

YAMANA GOLD $14.52 (Toronto symbol YRI; TSINetwork Rating: Speculative) (416-815-0220; www.yamana.com; Shares outstanding: 746.2 million; Market cap: $10.8 billion; Dividend yield: 1.3%) owns seven operating gold mines in Mexico, Brazil, Chile and Argentina. It also holds a 12.5% stake in the Alumbrera copper/gold mine in Argentina, and has three other properties in advanced stages of development.

In the three months ended September 30, 2011, Yamana’s revenue rose 22.3%, to $555.2 million from $454.0 million a year earlier (all figures except share price and market cap in U.S. dollars). Cash flow per share rose 57.1%, to $0.44 from $0.28.

The company raised its production by 4.4% during the quarter, to 279,274 ounces of gold from 267,409 a year earlier. As well, record-high gold prices pushed up Yamana’s selling price for gold by 37.4%.

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FORTRESS PAPER, $41, symbol FTP on Toronto, is an international specialty paper producer.

In April 2010, Fortress bought an idled pulp plant in Thurso, Quebec, for $3 million. It then restarted pulp production at this plant. That has been contributing to the company’s revenue and earnings.

Meanwhile, Fortress has been converting the plant to produce a type of cellulose called dissolving pulp, which is mainly used in viscosefibre, or rayon. The conversion should be finished in early November. Dissolving pulp prices are high, and Fortress has already signed contracts with companies in China.

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Newmont Mining Corp., New York symbol NEM, links future dividend hikes to the price of gold: it will raise the quarterly rate by $0.05 a share for each $100-per-ounce rise in its average selling price for gold in the preceding quarter. The company has now enhanced this policy. If gold prices exceed $1,700 an ounce, it will raise the quarterly dividend by an additional $0.025 a share, for a total increase of $0.075 a share. If gold prices rise above $2,000 an ounce, Newmont will raise the dividend by an additional $0.05 a share, for a total increase of $0.10 a share....

NEWMONT MINING $63.01 (New York symbol NEM; Shares outstanding: 501.0 million; Market cap: $30.9 billion; TSINetwork Rating: Average; Dividend yield: 1.9%; www.newmont.com) plans to link future dividend hikes to the price of gold: it will raise the quarterly rate by $0.05 a share for each $100-per-ounce rise in its average selling price for gold in the preceding quarter. The company has now enhanced this policy. If gold prices exceed $1,700 an ounce, it will raise the quarterly dividend by an additional $0.025 a share, for a total increase of $0.075 a share. If gold prices rise above $2,000 an ounce, Newmont will raise the dividend by an additional $0.05 a share, for a total increase of $0.10 a share....

Exeter Resource Corp., $3.98, symbol XRC on Toronto (Shares outstanding: 86.8 million; Market cap: $334.7 million; www.exeterresource.com), is a Vancouver-based junior-exploration company that is focused on developing its 100%-owned Caspiche gold/copper project in northern Chile. Caspiche is halfway between the Cerro Casale gold/copper project, owned by Kinross Gold and Barrick Gold, and Kinross’s producing Refugio mine. (Barrick paid Kinross $805 million for a 51% interest in Cerro Casale in October 2007.) Exeter is now undertaking a prefeasibility study at Caspiche to determine the economics of building an open-pit mine. The deposit could hold as much as 26.4 million ounces of gold, 6.7 billion pounds of copper and 62.9 million ounces of silver....

GENUINE PARTS CO., $50.80, New York symbol GPC, distributes auto parts to over 5,700 independent stores in North America. The company also operates about 1,000 auto parts stores under the NAPA banner. Auto parts account for roughly 50% of its sales. It gets the other 50% by distributing industrial parts, office furniture and electrical equipment.

This week, the company agreed to buy 30% of privately held Exego Group, which distributes auto parts through 430 company-owned stores in Australia and New Zealand. The deal closes on December 1, 2011.

Genuine will pay $150 million for this stake. That’s a little less than the $151.8 million, or $0.96 a share, that Genuine earned in the three months ended June 30, 2011. Genuine Parts has an option to buy the remaining 70% of Exego, provided Exego reaches certain earnings targets.

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Major Drilling, symbol MDI on Toronto, is a large contract-drilling firm that mainly serves the mining industry. In the three months ended July 31, 2011, Major’s revenue rose 49.9%, to $164.2 million from $109.5 million a year earlier. Earnings per share jumped 257.1%, to $0.25 from $0.13. During the quarter, many of Major’s customers increased their drilling activity to take advantage of record gold prices and high base metal prices. Gold mining firms supply 48% of Major’s revenue, followed by base metal and uranium miners (35%), and energy, coal and environmental drillers (17%)....

YAMANA GOLD $15.95 (Toronto symbol YRI; TSINetwork Rating: Speculative) (416-815-0220; www.yamana.com; Shares outstanding: 745.4 million; Market cap: $12.2 billion; Dividend yield: 0.7%) owns six operating gold mines in Brazil, Chile and Argentina. It also holds a 12.5% stake in the Alumbrera copper/gold mine in Argentina, and has four other properties in advanced stages of development. In the three months ended June 30, 2011, Yamana’s revenue jumped 63.1%, to $573.3 million from $351.4 million a year earlier (all figures except share price and market cap in U.S. dollars). Cash flow per share rose 69.2%, to $0.44 from $0.26. The company raised its production, and gold prices hit new record highs. During the quarter, Yamana produced 278,737 ounces of gold, up 10.1% from 253,264 ounces a year earlier. Its selling price for gold rose 25.6%....

PASON SYSTEMS $12.77 (Toronto symbol PSI; TSINetwork Rating: Speculative) (403-301-3400; www.pason.com; Shares outstanding: 91.3 million; Market cap: $1.0 billion; Dividend yield: 2.8%) rents equipment for monitoring and managing oil and gas rigs. It also sells communications systems, such as its satellite system, which companies use to remotely collect data from their drilling operations. Pason serves oil and gas companies and drilling contractors throughout Canada, the U.S., Mexico and Argentina. In the three months ended June 30, 2011, Pason’s revenue rose 22.3%, to $62.4 million from $51.0 million a year earlier. The company benefited as its clients increased their drilling, especially for shale gas and oil. Earnings rose 33.5%, to $8.2 million, or $0.10 a share, from $6.2 million, or $0.08 a share. The increased drilling pushed up Pason’s earnings. Strong demand also let the company raise its prices. Cash flow per share rose 21.7%, to $0.28 from $0.23....

IAMGOLD CORP., $22.39, symbol IMG on Toronto, owns the Niobec niobium mine in Quebec. Niobium is a rare metal that when used as an additive makes steel stronger, more heat resistant and easier to weld. Niobium is widely used in automobiles and oil and gas pipes. Right now, China accounts for about 25% of worldwide niobium consumption. IAMGold’s Niobec mine produces about 8% of the world’s niobium supply. The company is considering selling a 10% to 20% stake in Niobec, and using the proceeds to fund the mine’s expansion. After that, the company will consider selling more of the mine. IAMGold’s plan for Niobec looks especially attractive this week, after a consortium of five state-owned Chinese companies announced that they are buying 15% of the world’s largest niobium producer for $1.95 billion in cash. Brazil’s Companhia Brasileira de Metalurgia e Mineraçào, or CBMM, produces more than 80% of the world’s niobium supply....