It’s been a turbulent year for miners, with metal prices starting near multi-year lows as executives drew from a common playbook: slashing spending, costs and debt. Then came Brexit and the U.S. election and gold and base metals diverged.
What does 2017 hold? Bloomberg asked the heads of some of the biggest producers including Barrick Gold Corp., Newmont Mining Corp. and Teck Resources Ltd. Opinions vary, but there’s broad agreement that gold faces near-term headwinds from the Fed; that industrial metals have bottomed out but the dizzying 2016 rally may falter; and that miners will begin to spend more, possibly on deals, while keeping an eye on balance sheets.
Barrick’s Kelvin Dushnisky: “If we see an opportunity to acquire something, to increase our margin, earnings, NAV, then we’ll consider it. But if it’s just a matter of adding to our production base, we’re not interested.”
* Global economic uncertainty and loose monetary policy are supportive of gold prices in 2017; volatility around Fed affects near-term prices
* Mid to longer term, supply-demand fundamentals bullish for gold
* Costs can be lowered further although “low hanging fruit has been harvested”
* May see more M&A activity, depending on valuations
* Gold below $1,000 an ounce could pose survival challenge for some miners
For the rest of this article, click here: https://www.bloomberg.com/news/articles/2016-12-22/barrick-to-teck-give-outlooks-for-miners-rocked-by-brexit-trump