| Negative Free Cash Flow Isn’t That Bad for Some Gold Miners | |
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Intermediate Gold Miners Fell in 2015, What Lies Ahead? (Continued from Prior Part) Free cash flow
The ability to generate free cash flow is key in a weaker gold price environment. While miners’ ability to generate FCF (free cash flow) comes under more and more pressure, they reduce costs and capital expenditure. In this part of our series, we’ll see the gold miners that can generate cash in this market environment.
Ability to generate FCF
AngloGold Ashanti’s (AU) free cash flow for 3Q15 was $3 million after one-offs as compared to $30 million in 3Q14. The company remains focused on FCF generation by reducing costs and operational improvements. Though, the challenges in South Africa might not let the costs come down to the extent necessary for it to generate significant cash flow. On the other hand, further currency weakness could be one of the significant tailwinds for the company.
Sibanye Gold (SBGL) generates positive FCF that supports its above-average distribution paying ability.
Gold Fields (GFI) has been positioning the business to focus on generating FCF. While a fall in costs and operating efficiencies are driving FCFs, its troubled South Deep mine has been a drag on the company’s cash flows for some time. This is due to the mine’s costs, as they’re higher than average.
Negative FCF isn’t all that bad
Eldorado Gold (EGO) is generating negative FCF mainly because of high capital spending on development projects, unlike most of its peers (GDX). For the first nine months of 2015, the company generated negative FCF to the tune of $78 million. Going forward, the completion of growth capex is expected to see Eldorado generate positive FCF given stable gold prices.
New Gold (NGD) has also been generating negative FCFs mainly on the back of its elevated capex profile due to the development of New Afton earlier and now the Rainy River project. The company is expected to continue generating negative FCFs going forward a few years as capex on Rainy River unwinds.
Investors can get exposure to gold by investing directly in gold miners’ stocks or by investing in gold-backed ETFs like the Market Vectors Gold Miners ETF (GDX). AngloGold and Gold Fields account for 7.4% of GDX’s portfolio holdings.
Continue to Next Part Browse this series on Market Realist:
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AngloGold Ashanti Ltd
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PRODUCTEUR |
CODE : AU |
ISIN : US0351282068 |
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ProfilIndicateurs de MarchéVALEUR : Projets & res.Communiqués de PresseRapport annuelRISQUE : Profile actifsContactez la cie |
AngloGold est une société d’exploration minière d'or basée en Afrique Du Sud. AngloGold est productrice d'or, d'argent, de cuivre et de zinc au Bresil, au Canada, au Ghana, au Mali, en Australie, en Afrique Du Sud, en Argentine, en Guinee, en Namibie et en Tanzanie, en développement de projets de fer et d'or au Bresil, en Australie, en Afrique Du Sud, en Colombie et en Republique Democratique Du Congo, et détient divers projets d'exploration aux Philippines. Ses principaux projets en production sont CRIXÁS, MINERAÇÃO, SAO BENTO, ANGLOGOLD ASHANTI MINERAÇAO et CRIXAS MINE au Bresil, SUNRISE DAM GOLD MINE en Australie, NAVACHAB MINE et NAVACHAB en Namibie, YATELA, MORILA et SADIOLA au Mali, CERRO VANGUARDIA en Argentine, MPONENG (WESTERN DEEP NO. 1 SHAFT), TAUTONA (WESTERN DEEP NO.3 SHAFT), BAMBANANI, TAU LEKOA, MPONENG, SAVUKA, TAU TONA, GREAT NOLIGWA, KOPANANG et CRIPPLE CREEK & VICTOR (CRESSON MINE) en Afrique Du Sud, SIGUIRI en Guinee, TEBEREBIE, IDUAPRIEM, OBUASI et KUBI au Ghana, GEITA en Tanzanie et TROUT LAKE MINE et CALLINAN MINE au Canada, ses principaux projets en développement sont MOAB KHOTSONG en Afrique Du Sud, MINAS-RIO au Bresil, LA COLOSA et GRAMALOTE en Colombie, KIBALI (KILO-MOTO) en Republique Democratique Du Congo et TROPICANA en Australie et ses principaux projets en exploration sont HUALATAN et ER au Perou, MKURUMU en Tanzanie, 777 PROJECT et RIVARD au Canada, LOUBOUGOULA, GOODPASTER et ALAMOUTALA (SADIOLA II) au Mali, BAMBADJI au Senegal, MORRO VELHO au Bresil et SIANA aux Philippines. AngloGold est cotée aux Etats-Unis D'Amerique, en Australie et en Allemagne. Sa capitalisation boursière aujourd'hui est 11,7 milliards US$ (10,6 milliards €). La valeur de son action a atteint son plus bas niveau récent le 23 novembre 2018 à 10,00 US$, et son plus haut niveau récent le 13 septembre 2024 à 28,61 US$. AngloGold possède 409 109 984 actions en circulation. |