Gold prices are rising after a prolonged period of sluggish performance, but not all gold producers will be able to use 2018 to grow — as three earnings announcements released this week by senior Canadian gold companies demonstrated.
Barrick Gold Corp., the world’s largest producer, cut its 2018 production outlook to 4.5 million to 5 million ounces whereas Goldcorp Inc., at nearly half the size, kept its production outlook unchanged at 2.5 million ounces. Meanwhile, the smallest of the pack Agnico Eagle Mines Ltd., increased its production guidance to 1.53 million ounces.
The different growth outlooks not only reflect the difference in size between the companies, but also varying approaches to risk management — whether related to the geography of operations, the approach to acquisitions and explorations or other aspects of management.
“This is a tough business,” Sean Boyd, chief executive of Agnico, told the Financial Post, “and it’s getting tougher because of the lack of high quality possibilities in places you can actually do business.”
Last year his company posted 1.71 million ounces, its highest-ever production, at all-in sustaining costs of US$804, and it’s not predicting any decline. By 2020, Agnico predicts a 33 per cent increase to 2 million ounces of production while all-in sustaining costs are expected at between US$825 to US$875 per ounce.
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