gold prices

YAMANA GOLD INC. $10.28 (Toronto symbol YRI; SI Rating: Speculative) (416-815-0220; www.yamana.com; Shares outstanding: 733.4 million; Market cap: $7.5 billion; Dividend yield: 0.4%) reports that its revenue soared 355.2% in the three months ended December 31, 2009, to $399.8 million from $87.8 million a year earlier. (All figures except share price and market cap in U.S. dollars). Earnings (before one-time items) shot up 716.7%, to $100.9 million from $12.4 million. Per-share earnings rose 600.0%, to $0.14 from $0.02, on more shares outstanding. Cash flow per share rose 320.0%, to $0.21 from $0.05. Record high production and gold prices were the main reasons for the gains. The company produced 325,252 ounces of gold in the latest quarter, up 27.7% from 254,774 a year earlier. The rise is partly because its new Gualcamayo mine in Argentina started producing gold in July 2009. The company holds cash of $170.1 million. Its $529.5 million of long-term debt is just 7% of its market cap....

San Gold Corp., $3.27, symbol SGR on Toronto (Shares outstanding: 266.3 million; Market cap: $870.8 million), operates the Rice Lake gold mine in Manitoba. The mine is located about 200 kilometres northeast of Winnipeg and west of the Red Lake mining region in neighbouring Ontario. The Rice Lake gold mine produced 1.36 million ounces of gold from the time it was opened in 1932 until 1968. It then remained idle for almost thirty years until Rea Gold Corporation decided to rebuild it. Rea installed a hoist, drilled a new shaft and built new surface infrastructure. It also expanded the mill. But before Rea could begin mining gold at the site, it ran into serious financial trouble and filed for bankruptcy in 1997. Harmony Gold Mining Ltd. of South Africa bought the property in 1998, and produced 110,000 ounces of gold before low gold prices prompted the company to close the mine in 2001....

NEWMONT MINING $51.94 (New York symbol NEM; Shares outstanding: 483.0 million; Market cap: $25.1 billion; SI Rating: Average; Dividend yield: 0.8%) reports that its 2009 earnings jumped 71.6%, to $1.4 billion from $792.0 million in 2008. The company sold common shares to raise funds to buy the one-third of the Boddington gold mine in Australia that it didn’t already own. Because of the extra shares outstanding, per-share earnings rose 60.3%, to $2.79 from $1.74. Cash flow per share rose 45.0%, to $6.45 from $4.45. Revenue rose 25.8%, to $7.7 billion from $6.1 billion. Results rose on higher gold and copper prices. Newmont sold its gold for $977 an ounce in 2009. That’s up 11.8% from $874 in 2008. The company feels that gold prices could rise to $1,350 an ounce this year. Newmont has also done a good job of cutting its production costs. Its unit production cost fell 4% for gold and 54% for copper....

NEWMONT MINING CORP, $49.28, New York symbol NEM, rose 2% this week after the company reported 2009 earnings that beat the $2.41 a share that analysts were expecting. Newmont’s 2009 earnings jumped 71.6%, to $1.4 billion from $792.0 million in 2008. The company sold common shares to raise funds to buy the one-third of the Boddington gold mine in Australia that it didn’t already own. Because of the extra shares outstanding, per-share earnings rose 60.3%, to $2.79 from $1.74. Cash flow per share rose 45.0%, to $6.45 from $4.45. Revenue rose 25.8%, to $7.7 billion from $6.1 billion. Higher gold and copper prices were the main reason for the improved results. Newmont sold its gold for an average of $977 an ounce in 2009. That’s up 11.8% from $874 in 2008....

8 tips for spotting the best Canadian gold stocks

Cadan Resources, $0.90, symbol CXD on Toronto (Shares outstanding: 34.8 million; Market cap: $31.3 million), is a Canadian-based exploration company that develops and explores for gold, copper and silver on several large properties on the southern Philippine island of Mindanao. The company has combined a group of gold and copper/gold properties in eastern Mindanao into one package, the 15 x 3-kilometre Comval Project. Cadan also controls the T’Boli gold project in southern Mindanao. Exploration drilling and underground development at T’Boli has revealed that the site could contain as much as 420,000 ounces of gold and 1.6 million ounces of silver. Cadan hopes to start production at T’Boli in 2010. It’s now building a mine on the site. The company recently raised $1 million in a share issue to fund T’Boli’s development....

Today, many investors worry about a “W” shaped recession. That is, they worry that we are on the brink of a second recession that follows shortly after the first. Others are concerned that inflation will rise as the economy recovers. This explains the recent run-up in gold prices, for example, and the popularity of certain resource stocks (including crude oil stocks), which many investors see as a hedge against inflation. (See below for a full analysis of a diversified producer that’s been moving up recently.) ...

We’ve analyzed junior gold and mineral stocks for many years in Stock Pickers Digest, our newsletter for more aggressive investors. Many of our picks have shot up during the recent rise in gold from around $700 U.S. an ounce in the fall of 2008 to a recent peak of above $1,200 U.S. Gold has since dropped by about $100. But we think that’s a temporary fluctuation. ...

YAMANA GOLD $12.93 (Toronto symbol YRI; SI Rating: Speculative) (416-815-0220; www.yamana.com; Shares outstanding: 733.3 million; Market cap: $9.5 billion; Dividend yield: 0.3%) owns six operating gold mines in Brazil, Chile and Argentina. It also holds interests in five properties that are still under development. In the three months ended September 30, 2009, Yamana posted revenue of $333.2 million. That’s up 50.3% from $221.6 million a year earlier. (All figures except share price and market cap in U.S. dollars.) Earnings per share (excluding one-time items) tripled, to $0.12 from $0.04. Cash flow per share rose 64.2%, to $0.23 from $0.14. Record high production and gold prices were the main reasons for the gains. The company produced 314,707 ounces of gold in the latest quarter, up 33.7% from 235,406 a year earlier. The rise is partly because it started production at the Gualcamayo mine in Argentina....

REITMANS, $17.18, symbol RET.A on Toronto, reports that its earnings fell 17.7% in its third quarter, which ended August 1, 2009. The retailer earned $18.9 million, or $0.28 a share, compared to $23.0 million, or $0.33 a share, a year earlier. Sales fell slightly, to $270.7 million from $271.2 million. Same-store sales were down 2.2%. Reitmans owns 981 women’s clothing stores across Canada. These include 370 Reitmans, 167 Smart Set, 163 Penningtons, 123 Addition Elle, 76 Thyme Maternity, 65 RW & Co. and 17 Cassis stores....