The third quarter has been far better to the gold mining sector than Q2 was. The reason behind the improved results actually has less to do with the modest recovery in precious metals prices and more to do with their drop: with the metals slumping, mining firms were forced to become more efficient. In some cases, this meant trimming back their operations, while other firms gained economies of scale by acquiring other projects.
Here's a run-down of some of the third-quarter results.
Barrick On Track
There has been quite a bit of news regarding the debt restructuring that Barrick Gold (NYSE, TSX:ABX) has been undertaking. The company has been aggressively selling off some of its projects in order to cut debt. Barrick set a target of reducing its debt burden by $3 billion before the end of the year.
As part of its quarterly earnings announcement, Barrick indicated that it is on pace to meet its goal. The company has cut its total debt by 15%, down to about $11 billion. Nearly half of that total will not have be repaid until after 2032, while Barrick owes a relatively small $250 million in obligations coming due before 2018.
Although its earnings were lower, Barrick is taking its lumps now to be better positioned in the future. It will still issue a 2¢-per-share dividend in December and boasts some of the lowest all-in sustaining costs in the industry.
Other Noteworthy Q3 Earnings
Newmont Mining (NYSE, SWX:NEM; TSX:NMC), the second-largest gold miner behind Barrick in terms of output, posted a profit in the third quarter thanks to ramping up production. In fact, both companies boosted production in Q3. Barrick saw a slight increase year-on-year in quarterly gold production with 1.66 million ounces (51.6 metric tonnes) while Newmont saw output grow by 16.5% over that same period, jumping to 1.34 million ounces (41.7 tonnes). Newmont even cut its all-in sustaining costs by 16% and has plans to expand operations at its Tanami project in Australia.
Agnico Eagle Mines (NYSE, TSX:AEM) also posted profits during the quarter as the company continues to grow. The profit was due in large measure to Agnico Eagle setting a new quarterly production record with 441,124 ounces of gold output in Q3, up 26% year-on-year. It will distribute an 8¢ quarterly dividend to shareholders and succeeded in slashing its all-in sustaining costs by $300 in the span of a year.
Smaller producer OceanaGold (NYSE, TSX, NZX:OGC) also notched a quarterly profit, bouncing back from a million-dollar loss in Q2.
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