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Euphoria? What euphoria? The soaring price of gold has failed to ignite expansion frenzy at Canada’s largest gold miners. Instead, the latest round of earnings reports show an industry intent on reducing debt and rebuilding confidence.
Goldcorp Inc., which came up far short of analysts’ expectations , told a conference call on Thursday that it was installing a rigorous new accounting system, cutting staff at head and regional offices by a third and selling mines as it seeks to reassure investors that it is on the right track.
Barrick Gold Corp. announced plans to sell its half stake in the Kalgoorlie mine in western Australia as it continues to make progress toward meeting its target of reducing debt by at least $2-billion (U.S.) this year.
Even the star of the quarter, Agnico Eagle Mines Ltd., is paying down debt, despite blowing past earnings forecasts and bumping up its dividend. The new conservatism is good news for investors.
During the big run-up in gold prices from 2003 to 2011, most gold miners failed to generate lasting gains for shareholders. Many overspent on acquisitions and have suffered massive writedowns since the boom ended.
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