Canadian gold miners are set to report a sharp jump in fourth-quarter profit thanks to record-setting bullion prices, muted cost increases and recovering prices for base metals.
With gold having hit an all-time high of $1,226.10 an ounce in the final months of 2009, analysts say profits will be driven by a record gap between gold prices and mining costs, despite cost pressure from the weak U.S. dollar.
"We believe that the margins will still increase, and hence earnings will be better," said Paul Burchell, an analyst at Dundee Securities in Toronto.
Top miners Barrick Gold (ABX.TO:
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Kinross, Agnico-Eagle (AEM.TO:
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The expected sharp rise from a year before is largely due to the contrast between metals prices, which plunged late in 2008 when the global economic crises hit hard.
Even gold, usually seen as a safe haven in times of crises, dipped below $800 an ounce during the final months of 2008. The metal currently trades around $1,120.
Metals such as copper and zinc -- which factor into results of Barrick, Goldcorp, and mid-tier miners Yamana Gold (YRI.TO:
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Meanwhile, mining expenses have stayed more or less steady over the past year, as fuel costs are well off their pre-crisis highs, while some miners use base metal production as an offset to gold mining costs.
