| Comp: Is Barrick Gold’s High Debt a Cause for Concern? | |
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A Comparative Analysis of North American Gold Miners (Continued from Prior Part) Barrick’s high debt
Barrick Gold’s (ABX) high debt has been a major concern for investors. It repaid $250 million until 2Q15. As of 2Q15, combined with asset sales and already repaid debt, Barrick is close to nearly 90% of its reduction in the debt target of $3 billion. Assuming it pays down $3 billion on its debt this year, Barrick will still have $9.5 billion in long-term debt. However, its near-term debt repayment schedule is shrinking. It’s in the process of the redemption of 2016 notes. Then, it will have less than $250 million in debt due before 2018.
Prepaying debt and strengthening its balance sheet is Newmont Mining’s (NEM) top priority. It plans to repay $750 million in 2015. Out of the target for 2015, $275 million has already been paid in the first half of the year. During the earnings call, management maintained that it remains on track to pay down more debt during 2015. As of June 30, Newmont had $6 billion in cash and cash equivalents, marketable securities, and revolver capacity. The company doesn’t have any significant debt due until 2019. It maintains an investment-grade rating.
Goldcorp comfortable financially
Goldcorp (GG) is comfortable as far as its debt position is concerned. It repaid $305 million in debt during 2Q15. Goldcorp’s liquidity is also comfortable at $3.2 billion. This includes $940 million in cash and cash equivalents as well as $2.16 billion of an undrawn revolving facility. Goldcorp also extended its credit facility from $2 billion to $3 billion during 2Q15. The company’s management noted during the call that through the application of proceeds from the stake sale in Tahoe Resources (TAHO) in the third quarter, the drawn amount on its revolver should be down to zero. This should leave the company with only long-term debt of $2.5 billion. The first scheduled repayment for the debt is in 2018.
Kinross Gold’s (KGC) balance sheet is in good shape. On June 30, 2015, it had $2.5 billion in liquidity including $1 billion in cash. It’s also on a steady path to debt reduction. So far, it has repaid $30 million of its total target of $60 million for the year. The maturities on its loans have also been extended by a year from 2019 to 2020. This provides additional financial flexibility.
Yamana Gold’s (AUY) balance sheet also has significant flexibility. There are modest debt repayments over the short to medium term with only $118 million in principal repayments over the next two years. It had cash of $119 million and $260 million in revolving credit facility on June 30, 2015.
Yamana forms 2.80% of the Market Vectors Gold Miners Index (GDX) while the SPDR Gold Trust (GLD) gives exposure to gold prices.
In the next part of this series, we’ll see these companies’ liquidity profile.
Continue to Next Part Browse this series on Market Realist:
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VanEck Vectors Global Alternative Energy ETF
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PRODUCER |
CODE : YRI.TO |
ISIN : CA98462Y1007 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Yamana Gold is a gold producing company based in Canada. Yamana Gold produces gold, copper, molybdenum, silver and zinc in Argentina, in Brazil and in Chile, develops copper, gold, lead, molybdenum, silver and zinc in Argentina and in Mexico, and holds various exploration projects in Brazil. Its main assets in production are ALUMBRERA and GUALCAMAYO in Argentina, MINERA FLORIDA and EL PEÑON in Chile and FAZENDA BRASILEIRO, JACOBINA, CHAPADA MINE, SÃO VICENTE, FAZENDA NOVA and SÃO FRANCISCO in Brazil, its main assets in development are AGUA RICA in Argentina and MERCEDES in Mexico and its main exploration properties are MILLO in Peru, FERGUSSON ISLAND in Papua New Guinea, PICACHO in Mexico, CAIAMAR, PILAR, PAU A PIQUE, C1 SANTA LUZ and ERNESTO in Brazil and AMANCAYA and JERONIMO in Chile. Yamana Gold is listed in Canada, in Germany, in United Kingdom and in United States of America. Its market capitalisation is 374.3 millions as of today (US$ 299.3 millions, € 274.3 millions). Its stock quote reached its highest recent level on December 06, 1996 at 98.91, and its lowest recent point on August 22, 2003 at 1.20. Yamana Gold has 47 442 200 shares outstanding. |