UPDATE 2-Canadian miners cut jobs, spending as metal prices fall – by Bhaswati Mukhopadhyay (Reuters U.S. – April 29, 2013)

http://www.reuters.com/

April 29 (Reuters) – Three Canadian gold and silver miners announced cost cutting on Monday to try to protect their earnings in the face of falling precious metal prices.

Endeavour Silver Corp, Osisko Mining Corp and Orosur Mining Inc said they plan to reduce their workforce to cope with lower prices and margins this year. The shares of Orosur slid 31 percent as it warned revenue would fall but shares of the other two rose in response to their cost cutting.

Silver prices have fallen 26 percent to $23.98 per ounce in the past year, while gold prices declined 11 percent in the same period to close at $1,462.50 per ounce on Friday.

Gold producer Orosur said it had started reviewing its operations and it warned of lower production and revenue for 2013-2014 financial year. It shares fell as low as 32 Canadian cents.

Miners around the world have slashed spending in an effort to control runaway development budgets. The world’s No. 1 gold producer, Barrick Gold Corp, said this month it planned to further cut capital spending as it made a painful adjustment to the sustained slump in bullion prices.

More cost cutting was on the way for the industry, said analyst Chris Thompson of Raymond James.

“My sense is that everybody is going to do it in varying degrees, depending on the economies of their operations.”

Endeavour Silver said it will defer 20 percent of its planned 2013 capital expenditure of $85.8 million.

“It pays to be prudent at times like this,” Endeavour Chief Executive Bradford Cooke said in a statement.

Montreal-based Osisko, whose only operating mine, Malartic, is located in the Abitibi mining district in Quebec, said its discretionary investment program had been cut. It had planned for capital expenditure of C$220 million for 2013.

For the rest of this article, click here:  http://www.reuters.com/article/2013/04/29/endeavoursilver-costcut-idUSL3N0DG25J20130429

 

 

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