The weak loonie is providing a powerful boost for many Canadian gold miners. The dollar’s long decline has already gone a long way to cushioning the impact of falling bullion prices on Canadian producers. In recent months, its further weakening has added to the cost advantage of domestic producers.
The buoyant effect of the low Canadian dollar has combined with a rise in the gold price over recent weeks to drive gold mining stocks listed on the Toronto Stock Exchange to a 5.8-per-cent gain so far this year.
This has been among the few bright spots in a mining industry hammered by falling prices for more prosaic metals. In stark contrast to the gold producers, diversified miners on the Toronto exchange have lost an average of 27.4 per cent since New Year’s Day.
“If you’re operating a Canadian gold mine, you’re doing just fine,” said Jamie Porter, chief financial officer at Alamos Gold Inc., the Toronto-based owner of the Young-Davidson mine in northern Ontario. He lists the weak loonie as one reason for that good health.
Gold, like other metals, is priced in U.S. dollars, and its value has sustained grievous injury when gauged in terms of greenbacks.
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