What Investors Should Know About 2013’s Top Gold Producers

The activities of Barrick Gold, Goldcorp, and Kinross Gold are all worthy of note.

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The Motley Fool

Three TSX-listed companies are on the Top 10 Producers list for 2013 by Metals Focus. Let’s take a look at what they’re doing.

1. Barrick Gold

Jamie Sokalsky, Barrick Gold’s (TSX: ABX)(NYSE: ABX) President and CEO, said recently that “Barrick is a considerably different company today than it was a year ago — leaner, stronger and more financially flexible. Our first quarter all-in sustaining costs of $833 per ounce, $100 per ounce below the prior year quarter, demonstrate that our efforts to reduce costs are delivering tangible results.”

In 2013, Barrick reduced its capital expenditures and costs by $2 billion. Five mines in the Americas contributed 55%, or 4 million ounces, of the company’s total production in 2013. These were the Cortez, Goldstrike, Lagunas Norte, Veladero, and Pueblo Viejo mines.

Barrick had operating cash flow of $585 million in Q1 2014. It had cash and cash equivalents of $2.7 billion as at March 31, 2014.

At the end of April, Barrick Gold announced a dividend for the quarter of U.S.$0.05 per share.

2. Goldcorp

Goldcorp’s (TSX: G)(NYSE: GG) gold production totaled 768,900 ounces for Q4 2013 and 2.67 million ounces for 2013. This is in comparison to 2012’s 700,400 ounces and 2.4 million ounces, respectively.

For Q1 2014, Goldcorp’s share of gold production increased to 679,900 ounces, versus 614,600 ounces in 2013. The company had all-in sustaining costs of $840 per gold ounce in Q1, versus $1,134 in Q1 2013.

Goldcorp’s focus is on cost savings and increased cash flow. In addition, its strategy is to advance three major projects toward production this year. The Cerro Negro project in Argentina is on course to produce its first gold in 2014. The expectation is that the Eleonore project in Quebec will commence production in the fourth quarter of this year. The Cochenour project in the Red Lake district is expected to be complete in mid-2015.

In May, Goldcorp declared its fifth monthly dividend payment for 2014 of $0.05 per share.

3. Kinross Gold

For 2013, Kinross Gold (TSX: K)(NYSE: KGC) exceeded its initial 2013 production guidance of 2.4-2.6 million gold equivalent ounces, or Au eq. oz. It had a record year-end output of 2.63 million Au eq. oz.

For Q1 2014, Kinross produced 664,690 Au eq. oz., versus 648,897 in Q1 2013. The company expects to be within this year’s forecast guidance for production of 2.5-2.7 million Au eq. oz.

Kinross’s high-grade Dvoinoye deposit in Russia is expected to produce 235,000-300,000 Au eq. oz. a year for the next three years.

In a tough gold market, Kinross is reducing capital expenditures. In 2012, its capital spending was $1.9 billion. In 2013, it was $1.26 billion. For 2014, Kinross has forecast capital spending of $675 million.

The world’s top gold producers are worth some due diligence if you want precious metals as part of your stock portfolio. The Top 10 Producers list for 2013 by Metals Focus is a good place to begin your research, and these three companies on the TSX are worth considering.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Michael Ugulini has no positions in any of the companies mentioned in this article.

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