BMO: Reserves, Guidance To Be Key In Gold Miners' Earnings
(Kitco News) - Much of the investor focus in the next round of earnings reports from the major precious-metals producers will be on 2019 output guidance and the replacement of reserves, says BMO Capital Markets.
Reporting by the major producers begins Feb. 13, when Barrick Gold Corp. (NYSE: GOLD; TSX: ABX) is scheduled to release fourth-quarter results. Streaming and royalty company Royal Gold Inc. (Nasdaq: RGLD) is scheduled to report after markets close Wednesday.
In a research note this week, BMO said that its earnings expectations for the large producers and royalty/streaming companies are broadly in line with consensus estimates.
“Topical amongst the large producers will be 2019 guidance and reserve replacement,” BMO said. “In aggregate, we expect the large producers to report a small decline in reserves.”
Most of the medium-sized gold producers that BMO follows have already released 2018 production and 2019 guidance. As a result, analysts said, earnings estimates are in a relatively tight band.
“That being said, Q4/18 seemed to be dogged with weather issues, most notably for EVN, NST, and OGC,” BMO said, referring to Evolution Mining, Northern Star Resources Ltd. and OceanaGold Corp. “This could lead to some volatility of earnings for the quarter, despite many production statistics already being released.”
Most of the silver-exposed companies have likewise already reported fourth-quarter production results, so BMO said there are no notable variations in its expectations for earnings per share compared to consensus estimates.
“We note that Coeur [Mining, Inc. (NYSE: CDE)] and Hecla [Mining Co. (NYSE: HL)] have not provided 2019 guidance yet, which will be a focus for us, specifically at Silvertip for CDE and Nevada for HL,” BMO said. “We are awaiting an update on FVI's [Fortuna Silver Mines’] Lindero project, which is expected to enter production later this year.”