This document analyzes hedging strategies for Newmont Mining Co. It finds that NEM's stock price is highly correlated with gold prices based on regression analysis. It evaluates whether NEM should hedge, considering risks like losing control of its Indonesian operations. Two hedging strategies are proposed: partial hedging using gold futures contracts, and full hedging using long put options. Long-term strategies include operational hedges like gold loans and diversification, plus financial hedges like futures contracts.
The document provides an overview of the gold mining industry, including production processes, industry structure, financial structures, and risk assessments. It then summarizes the hedging strategies and positions of three major gold mining companies - Barrick Gold, Newmont Mining, and Kinross Gold. Barrick maintains an 18% hedge of its reserves to reduce earnings volatility. Newmont is a non-hedger and views gold as money. Kinross is also a non-hedger with 3.5% of reserves hedged falling to zero by 2005.
This document provides an overview of investing in gold, including:
1. It discusses the historical price movements of gold over the last 95 years and current gold reserves by country.
2. It outlines factors that may influence future gold prices such as central bank purchases, limited supply, and economic uncertainty.
3. It recommends allocating 5-10% of a portfolio to gold as a hedge against inflation and market volatility.
This corporate document provides an update for March 2011. It discusses forward-looking statements and the risks associated with them. Key points include increasing gold production to 1.5 million ounces by 2014, growing gold reserves to over 22 million ounces, acquiring smaller companies, maintaining low costs, and increasing net free cash flow and dividends per share. Operating results for 2010 show growing revenue diversified across six mines, with total gold production of 987,609 ounces and total cash costs of $451 per ounce. Financial results for 2010 were record levels of earnings and cash flow driven by production growth.
The document discusses several topics related to foreign direct investment, international monetary systems, and currency exchange rates:
1. It outlines discussions on Western automobile firms investing in Russia and China's recent currency change.
2. It reviews chapters from a textbook on foreign direct investment, political economy, foreign exchange, and the international monetary system.
3. It includes questions and answers on these topics, such as the impact of foreign investment in Ireland and debates around regulating foreign direct investment.
4. It discusses currency swap examples and applications of interest rate parity and purchasing power parity theories to forecast exchange rates.
In 3 sentences or less, this document summarizes topics to be discussed or reviewed related to foreign investment,
This document summarizes the topics and discussions for an international economics class. The class will cover chapters on foreign direct investment, political economy of FDI, foreign exchange, and the international monetary system. They will have two discussions - one on Western automobile firms investing in Russia and another on China's currency change. The document then provides discussion questions for each chapter to help students review the material in preparation for an upcoming midterm exam.
http://pwc.to/UChIYB
Selon la dernière édition de l’étude « Global Gold Price Report » de PwC, menée auprès des 46 plus grandes sociétés aurifères cotées à la bourse de Toronto (TSX), l’année 2013 s’avère prometteuse, avec une hausse des cours attendue par 80% des personnes interrogées.
Goldmoney Investor Presentation November 2019Goldmoney Inc.
The document is an investor presentation from Goldmoney Inc. summarizing the company's Q2 2020 financial results and business operations. Some key highlights include record quarterly revenue of $127.2 million, gross margin of $2.5 million, and total comprehensive income of $2.7 million. Tangible common equity increased to $133.5 million while client assets under custody grew to $1.9 billion. The company also increased its quarterly dividend by 20% and implemented a gold-linked dividend policy.
Gold: Role in Institutional Portfolios | Aranca Articles and PublicationsAranca
Aranca note the long standing benefits of diversification in investments and the role that gold can play towards achieving an optimal risk-return portfolio. Learn more about gold ETF demand, gold spot price, S&P 500 trend.
The document provides an overview of the gold mining industry, including production processes, industry structure, financial structures, and risk assessments. It then summarizes the hedging strategies and positions of three major gold mining companies - Barrick Gold, Newmont Mining, and Kinross Gold. Barrick maintains an 18% hedge of its reserves to reduce earnings volatility. Newmont is a non-hedger and views gold as money. Kinross is also a non-hedger with 3.5% of reserves hedged falling to zero by 2005.
This document provides an overview of investing in gold, including:
1. It discusses the historical price movements of gold over the last 95 years and current gold reserves by country.
2. It outlines factors that may influence future gold prices such as central bank purchases, limited supply, and economic uncertainty.
3. It recommends allocating 5-10% of a portfolio to gold as a hedge against inflation and market volatility.
This corporate document provides an update for March 2011. It discusses forward-looking statements and the risks associated with them. Key points include increasing gold production to 1.5 million ounces by 2014, growing gold reserves to over 22 million ounces, acquiring smaller companies, maintaining low costs, and increasing net free cash flow and dividends per share. Operating results for 2010 show growing revenue diversified across six mines, with total gold production of 987,609 ounces and total cash costs of $451 per ounce. Financial results for 2010 were record levels of earnings and cash flow driven by production growth.
The document discusses several topics related to foreign direct investment, international monetary systems, and currency exchange rates:
1. It outlines discussions on Western automobile firms investing in Russia and China's recent currency change.
2. It reviews chapters from a textbook on foreign direct investment, political economy, foreign exchange, and the international monetary system.
3. It includes questions and answers on these topics, such as the impact of foreign investment in Ireland and debates around regulating foreign direct investment.
4. It discusses currency swap examples and applications of interest rate parity and purchasing power parity theories to forecast exchange rates.
In 3 sentences or less, this document summarizes topics to be discussed or reviewed related to foreign investment,
This document summarizes the topics and discussions for an international economics class. The class will cover chapters on foreign direct investment, political economy of FDI, foreign exchange, and the international monetary system. They will have two discussions - one on Western automobile firms investing in Russia and another on China's currency change. The document then provides discussion questions for each chapter to help students review the material in preparation for an upcoming midterm exam.
http://pwc.to/UChIYB
Selon la dernière édition de l’étude « Global Gold Price Report » de PwC, menée auprès des 46 plus grandes sociétés aurifères cotées à la bourse de Toronto (TSX), l’année 2013 s’avère prometteuse, avec une hausse des cours attendue par 80% des personnes interrogées.
Goldmoney Investor Presentation November 2019Goldmoney Inc.
The document is an investor presentation from Goldmoney Inc. summarizing the company's Q2 2020 financial results and business operations. Some key highlights include record quarterly revenue of $127.2 million, gross margin of $2.5 million, and total comprehensive income of $2.7 million. Tangible common equity increased to $133.5 million while client assets under custody grew to $1.9 billion. The company also increased its quarterly dividend by 20% and implemented a gold-linked dividend policy.
Gold: Role in Institutional Portfolios | Aranca Articles and PublicationsAranca
Aranca note the long standing benefits of diversification in investments and the role that gold can play towards achieving an optimal risk-return portfolio. Learn more about gold ETF demand, gold spot price, S&P 500 trend.
This document initiates coverage on four silver mining companies - Bear Creek Mining, Coeur d'Alene Mines, Fortuna Silver Mines, and Silver Wheaton Corp. It provides an overview of the silver market, noting growing industrial demand and recent increases in investment and ETF demand. The document establishes an investment framework for analyzing silver equities, including established producers, growing producers, and world-class development projects. Individual analyses and recommendations are provided for each of the four companies.
Agnico-Eagle Mines Limited reported strong second quarter 2012 results, with record quarterly gold production from currently operating mines of 265,350 ounces at total cash costs of $660 per ounce. Cash provided by operating activities was a record $194 million for the quarter. Production guidance for 2012 was increased to approximately 975,000 ounces of gold. The company has a portfolio of quality, long-life mines that continue to perform well and provide low-risk production growth from existing assets. Significant exploration upside and reserve growth have been demonstrated at the company's 100%-owned assets.
This document compares returns on fixed deposits versus gold investments. Fixed deposits provide assured but lower returns that do not usually beat inflation. Returns are guaranteed and not impacted by market forces. In contrast, gold investments provide returns linked to fluctuating market prices influenced by various domestic and international factors. Returns on gold are taxed as capital gains when sold, with long term gains taxed at 20% after three years. Fixed deposit interest is taxable annually. While gold carries higher risk, it may provide higher returns depending on price movements in the gold market.
Joseph Fazzini of Dundee Capital Markets discusses gold equities that can weather volatility in the gold price. He recommends focusing on quality names with low-cost assets, strong balance sheets, and responsible management. Specifically, he notes positive views of B2Gold, Detour Gold, Kirkland Lake Gold, SEMAFO, Claude Resources, and Continental Gold. Fazzini expects M&A activity to increase as companies consolidate to improve access to capital in the challenging market environment. Overall, investors are advised to focus on quality producers with solid fundamentals rather than higher-risk explorers.
Goldmoney investor presentation November 2020Goldmoney Inc.
Goldmoney Inc. is a precious metals focused financial services company. It provides online precious metals custody and trading services through its Goldmoney Holding platform. The company reported record quarterly revenue and net income in Q2 2021, driven by strong growth across its business lines including Goldmoney.com, SchiffGold, and its investment in Menē Inc. Goldmoney has a global network of vaults storing over $2.5 billion in client assets and pursues a business model that aims to generate returns through accumulating precious metals over time.
- Goldmoney Inc. released its fiscal year 2020 investor deck, reporting record annual revenue of $458.9 million, up 64% year-over-year. It also achieved record annual gross profit of $22.3 million, up 96% year-over-year.
- Goldmoney provides precious metals custody services through its online Goldmoney Holding and stores client assets totaling $2.07 billion in vaults around the world. It is pursuing growth through subsidiaries like SchiffGold, Menē jewelry, and Lend & Borrow Trust peer-to-peer lending.
- The company had a strong year of growth across its business lines and is focused on maximizing the potential of its ecosystem
- Primero Mining Corp. released its first quarter report for 2013, which included a management discussion and analysis section.
- Production in Q1 2013 was 27,656 gold equivalent ounces, up from 25,793 in Q1 2012. Cash costs per ounce were $719 in Q1 2013 compared to $674 in Q1 2012.
- Net income was $17.3 million in Q1 2013, compared to $30.1 million for the same period in 2012. Adjusted net income was $9.4 million in Q1 2013 versus $18.8 million in Q1 2012.
- On December 31, 2012, Primero reported an increase in probable gold reserves at its San
- Primero Mining Corp.'s third quarter 2012 report discusses operations at its sole producing property, the San Dimas mine in Mexico.
- Key highlights include gold and silver production of 18,892 ounces and 1.14 million ounces respectively in Q3 2012.
- Cash costs per gold equivalent ounce were $699, while cash costs per gold ounce on a by-product basis were $363.
- Net income was $11.6 million, while adjusted net income was $2.6 million.
- Subsequent events include receiving a tax ruling confirming its Mexican subsidiary's silver sales revenue recognition and announcing a mine expansion project at San Dimas.
Agnico Eagle Mines Limited is a gold mining company with operations in Canada, Finland, and Mexico. It is focused on building a high quality, manageable gold business in challenging times. Agnico Eagle has delivered record quarterly gold production in Q3 2013 at a low total cash cost of $591/oz. The company has improved its 2013 production and cost guidance and expects moderate, achievable production growth through 2015 as new projects come online. Agnico Eagle has adequate financial flexibility with a strong balance sheet and available credit facilities to execute its growth plans.
- Primero Mining Corp. is a Canadian precious metals producer focused on building a portfolio of assets in the Americas. It currently operates the San Dimas Mine in Mexico.
- In Q2 2012, production increased 22% compared to Q2 2011. Gold and silver production and sales exceeded the same period of the previous year.
- Net income was $15 million in Q2 2012 compared to $3.9 million in Q2 2011. Cash flows from operations were also higher.
- Based on year-to-date performance exceeding expectations, the company revised its 2012 production outlook upward by 10% to a range of 110,000-120,000 gold equivalent ounces.
This document is Primero Mining Corp.'s year end and fourth quarter report for 2012. It discusses the company's financial results for 2012, including producing over 111,000 gold equivalent ounces and earning over $49 million in net income for the year. It also notes that in the fourth quarter, Primero entered into an agreement to acquire Cerro Resources NL and its Cerro Del Gallo development project in Mexico, which will diversify its asset base. The report provides highlights of Primero's financial and operating results for 2012 and discusses the company's focus on building a portfolio of precious metals assets in the Americas.
Scotia building a high quality manageable gold business in challenging timesAgnico Eagle Mines
Agnico Eagle Mines is preparing to begin commercial production at its La India gold mine in Mexico in Q1 2014, ahead of schedule and on budget. La India is expected to produce approximately 90,000 ounces of gold per year at total cash costs of $500 per ounce. The project was commissioned just 22 months after Agnico Eagle acquired it in 2011 for $157.6 million. La India adds a new source of low-cost gold production in Mexico for Agnico Eagle.
- Primero Mining Corp. released its second quarter report for 2013, which included financial results and operating data for the San Dimas Mine in Mexico for the quarter ending June 30, 2013.
- Production of gold equivalent ounces, gold ounces, and silver ounces all increased compared to the same period in 2012. Cash costs per ounce decreased on a by-product basis but increased on a gold equivalent basis.
- Net income was $4.2 million for the quarter, adjusted net income was $17 million. The company accrued $6.9 million for social security payments in Mexico dating back to 2010.
- During the quarter the company acquired Cerro Resources NL, adding the Cerro del Gallo
- Primero Mining Corp. released its first quarter 2012 report which included condensed consolidated interim financial statements and management's discussion and analysis.
- Production increased compared to Q1 2011 with gold and silver production of 22,588 ounces and 1.32 million ounces respectively.
- Net income was $18.6 million compared to a net loss in Q1 2011, driven by higher production and metal prices.
- The company changed the reserve and resource estimation methodology used at its San Dimas mine, resulting in a reduction in reserves and resources.
49 north conference building a high quality manageable gold business in cha...Agnico Eagle Mines
David Smith, CFO of Agnico Eagle Mines Ltd., presented at the 49 North Resource Conference in San Francisco on December 5, 2013. He discussed Agnico Eagle's improved gold production guidance for 2013, reduced costs, and plans to further improve cash flow generation in 2014. Smith also highlighted Agnico Eagle's portfolio of long-life, low-cost mines in politically stable jurisdictions, moderate production growth outlook, and strong financial position providing flexibility to execute its business plan.
2012A
2013E
2014E
2015E
Estimate
1) Agnico Eagle outlined its strategy for managing a quality gold business in a challenging price environment, focusing on low-cost production growth and financial flexibility.
2) The company expects production to increase moderately from 1.06 million ounces in 2013 to over 1.2 million ounces by 2015 through projects in Canada, Mexico, and Finland.
3) Agnico Eagle has adequate cash reserves and available credit to fund its capital expenditures budget and continued moderate production growth while maintaining a manageable debt level.
- The document is Primero Mining Corp.'s third quarter report for 2013, which includes highlights of their financial and operating results.
- In Q3 2013, Primero produced 41,998 gold equivalent ounces, sold over 1 million ounces of silver, and earned a net income of $10.1 million.
- Total cash costs per ounce in Q3 2013 were $516 per gold equivalent ounce and $252 per gold ounce on a by-product basis, down significantly from the previous year.
Scotia ceo roundtable june 25-2013- final- for scotia 3RoyalGold
Scotiabank hosted a CEO Royalty Roundtable on June 25, 2013. Royal Gold presented at the roundtable, outlining their portfolio of high-quality royalty assets, robust balance sheet, and attractive growth profile. Royal Gold expects to see a 47% increase in gold equivalent ounces from the addition of Mt. Milligan to production, and future growth from both Mt. Milligan and Pascua-Lama entering commercial production in late 2013 and post-2014, respectively. Royal Gold also highlighted their strong financial position, with substantial cash reserves and low debt.
This document initiates coverage on four silver mining companies - Bear Creek Mining, Coeur d'Alene Mines, Fortuna Silver Mines, and Silver Wheaton Corp. It provides an overview of the silver market, noting growing industrial demand and recent increases in investment and ETF demand. The document establishes an investment framework for analyzing silver equities, including established producers, growing producers, and world-class development projects. Individual analyses and recommendations are provided for each of the four companies.
Agnico-Eagle Mines Limited reported strong second quarter 2012 results, with record quarterly gold production from currently operating mines of 265,350 ounces at total cash costs of $660 per ounce. Cash provided by operating activities was a record $194 million for the quarter. Production guidance for 2012 was increased to approximately 975,000 ounces of gold. The company has a portfolio of quality, long-life mines that continue to perform well and provide low-risk production growth from existing assets. Significant exploration upside and reserve growth have been demonstrated at the company's 100%-owned assets.
This document compares returns on fixed deposits versus gold investments. Fixed deposits provide assured but lower returns that do not usually beat inflation. Returns are guaranteed and not impacted by market forces. In contrast, gold investments provide returns linked to fluctuating market prices influenced by various domestic and international factors. Returns on gold are taxed as capital gains when sold, with long term gains taxed at 20% after three years. Fixed deposit interest is taxable annually. While gold carries higher risk, it may provide higher returns depending on price movements in the gold market.
Joseph Fazzini of Dundee Capital Markets discusses gold equities that can weather volatility in the gold price. He recommends focusing on quality names with low-cost assets, strong balance sheets, and responsible management. Specifically, he notes positive views of B2Gold, Detour Gold, Kirkland Lake Gold, SEMAFO, Claude Resources, and Continental Gold. Fazzini expects M&A activity to increase as companies consolidate to improve access to capital in the challenging market environment. Overall, investors are advised to focus on quality producers with solid fundamentals rather than higher-risk explorers.
Goldmoney investor presentation November 2020Goldmoney Inc.
Goldmoney Inc. is a precious metals focused financial services company. It provides online precious metals custody and trading services through its Goldmoney Holding platform. The company reported record quarterly revenue and net income in Q2 2021, driven by strong growth across its business lines including Goldmoney.com, SchiffGold, and its investment in Menē Inc. Goldmoney has a global network of vaults storing over $2.5 billion in client assets and pursues a business model that aims to generate returns through accumulating precious metals over time.
- Goldmoney Inc. released its fiscal year 2020 investor deck, reporting record annual revenue of $458.9 million, up 64% year-over-year. It also achieved record annual gross profit of $22.3 million, up 96% year-over-year.
- Goldmoney provides precious metals custody services through its online Goldmoney Holding and stores client assets totaling $2.07 billion in vaults around the world. It is pursuing growth through subsidiaries like SchiffGold, Menē jewelry, and Lend & Borrow Trust peer-to-peer lending.
- The company had a strong year of growth across its business lines and is focused on maximizing the potential of its ecosystem
- Primero Mining Corp. released its first quarter report for 2013, which included a management discussion and analysis section.
- Production in Q1 2013 was 27,656 gold equivalent ounces, up from 25,793 in Q1 2012. Cash costs per ounce were $719 in Q1 2013 compared to $674 in Q1 2012.
- Net income was $17.3 million in Q1 2013, compared to $30.1 million for the same period in 2012. Adjusted net income was $9.4 million in Q1 2013 versus $18.8 million in Q1 2012.
- On December 31, 2012, Primero reported an increase in probable gold reserves at its San
- Primero Mining Corp.'s third quarter 2012 report discusses operations at its sole producing property, the San Dimas mine in Mexico.
- Key highlights include gold and silver production of 18,892 ounces and 1.14 million ounces respectively in Q3 2012.
- Cash costs per gold equivalent ounce were $699, while cash costs per gold ounce on a by-product basis were $363.
- Net income was $11.6 million, while adjusted net income was $2.6 million.
- Subsequent events include receiving a tax ruling confirming its Mexican subsidiary's silver sales revenue recognition and announcing a mine expansion project at San Dimas.
Agnico Eagle Mines Limited is a gold mining company with operations in Canada, Finland, and Mexico. It is focused on building a high quality, manageable gold business in challenging times. Agnico Eagle has delivered record quarterly gold production in Q3 2013 at a low total cash cost of $591/oz. The company has improved its 2013 production and cost guidance and expects moderate, achievable production growth through 2015 as new projects come online. Agnico Eagle has adequate financial flexibility with a strong balance sheet and available credit facilities to execute its growth plans.
- Primero Mining Corp. is a Canadian precious metals producer focused on building a portfolio of assets in the Americas. It currently operates the San Dimas Mine in Mexico.
- In Q2 2012, production increased 22% compared to Q2 2011. Gold and silver production and sales exceeded the same period of the previous year.
- Net income was $15 million in Q2 2012 compared to $3.9 million in Q2 2011. Cash flows from operations were also higher.
- Based on year-to-date performance exceeding expectations, the company revised its 2012 production outlook upward by 10% to a range of 110,000-120,000 gold equivalent ounces.
This document is Primero Mining Corp.'s year end and fourth quarter report for 2012. It discusses the company's financial results for 2012, including producing over 111,000 gold equivalent ounces and earning over $49 million in net income for the year. It also notes that in the fourth quarter, Primero entered into an agreement to acquire Cerro Resources NL and its Cerro Del Gallo development project in Mexico, which will diversify its asset base. The report provides highlights of Primero's financial and operating results for 2012 and discusses the company's focus on building a portfolio of precious metals assets in the Americas.
Scotia building a high quality manageable gold business in challenging timesAgnico Eagle Mines
Agnico Eagle Mines is preparing to begin commercial production at its La India gold mine in Mexico in Q1 2014, ahead of schedule and on budget. La India is expected to produce approximately 90,000 ounces of gold per year at total cash costs of $500 per ounce. The project was commissioned just 22 months after Agnico Eagle acquired it in 2011 for $157.6 million. La India adds a new source of low-cost gold production in Mexico for Agnico Eagle.
- Primero Mining Corp. released its second quarter report for 2013, which included financial results and operating data for the San Dimas Mine in Mexico for the quarter ending June 30, 2013.
- Production of gold equivalent ounces, gold ounces, and silver ounces all increased compared to the same period in 2012. Cash costs per ounce decreased on a by-product basis but increased on a gold equivalent basis.
- Net income was $4.2 million for the quarter, adjusted net income was $17 million. The company accrued $6.9 million for social security payments in Mexico dating back to 2010.
- During the quarter the company acquired Cerro Resources NL, adding the Cerro del Gallo
- Primero Mining Corp. released its first quarter 2012 report which included condensed consolidated interim financial statements and management's discussion and analysis.
- Production increased compared to Q1 2011 with gold and silver production of 22,588 ounces and 1.32 million ounces respectively.
- Net income was $18.6 million compared to a net loss in Q1 2011, driven by higher production and metal prices.
- The company changed the reserve and resource estimation methodology used at its San Dimas mine, resulting in a reduction in reserves and resources.
49 north conference building a high quality manageable gold business in cha...Agnico Eagle Mines
David Smith, CFO of Agnico Eagle Mines Ltd., presented at the 49 North Resource Conference in San Francisco on December 5, 2013. He discussed Agnico Eagle's improved gold production guidance for 2013, reduced costs, and plans to further improve cash flow generation in 2014. Smith also highlighted Agnico Eagle's portfolio of long-life, low-cost mines in politically stable jurisdictions, moderate production growth outlook, and strong financial position providing flexibility to execute its business plan.
2012A
2013E
2014E
2015E
Estimate
1) Agnico Eagle outlined its strategy for managing a quality gold business in a challenging price environment, focusing on low-cost production growth and financial flexibility.
2) The company expects production to increase moderately from 1.06 million ounces in 2013 to over 1.2 million ounces by 2015 through projects in Canada, Mexico, and Finland.
3) Agnico Eagle has adequate cash reserves and available credit to fund its capital expenditures budget and continued moderate production growth while maintaining a manageable debt level.
- The document is Primero Mining Corp.'s third quarter report for 2013, which includes highlights of their financial and operating results.
- In Q3 2013, Primero produced 41,998 gold equivalent ounces, sold over 1 million ounces of silver, and earned a net income of $10.1 million.
- Total cash costs per ounce in Q3 2013 were $516 per gold equivalent ounce and $252 per gold ounce on a by-product basis, down significantly from the previous year.
Scotia ceo roundtable june 25-2013- final- for scotia 3RoyalGold
Scotiabank hosted a CEO Royalty Roundtable on June 25, 2013. Royal Gold presented at the roundtable, outlining their portfolio of high-quality royalty assets, robust balance sheet, and attractive growth profile. Royal Gold expects to see a 47% increase in gold equivalent ounces from the addition of Mt. Milligan to production, and future growth from both Mt. Milligan and Pascua-Lama entering commercial production in late 2013 and post-2014, respectively. Royal Gold also highlighted their strong financial position, with substantial cash reserves and low debt.
- Agnico Eagle reported record quarterly gold production of 315,828 ounces at a total cash cost of $591 per ounce in Q3 2013.
- Production and cost guidance for 2013 was increased and decreased, respectively, with production now expected to be approximately 1,060,000 ounces of gold at a total cash cost of approximately $690 per ounce.
- Key factors contributing to the strong results included record quarterly production at Meadowbank and improved costs across all operations driven by ongoing cost reduction initiatives.
- Wesdome Gold Mines is a Canadian gold mining company operating the Eagle River mine in Wawa, Ontario and the Kiena Mine Complex in Val d'Or, Quebec.
- In 2009, Wesdome achieved record production of 96,152 ounces of gold, revenues of $103.5 million, earnings of $32.2 million, and cash flow from operations of $41.3 million.
- Key drivers of the improved financial performance were increased gold sales and higher gold prices realized compared to 2008, along with stabilized operating costs.
Agnico Eagle Mines reported first quarter 2013 results with gold production of 236,975 ounces at a total cash cost of $740 per ounce. Cash flow from operations was $146 million. Production and costs were in line with expectations. The company's Goldex and La India projects remain ahead of schedule with initial production expected in Q4 2013 and commissioning beginning late Q4 2013 respectively. Kittila's scheduled mill maintenance was extended resulting in reduced 2013 production estimates.
Agnico Eagle Mines reported first quarter 2013 results with gold production of 236,975 ounces at a total cash cost of $740 per ounce. Cash flow from operations was $146 million. Production and costs were in line with expectations. The company's Goldex and La India projects remain ahead of schedule with initial production expected in Q4 2013 and commissioning beginning late Q4 2013 respectively. Kittila's scheduled mill maintenance was extended resulting in reduced 2013 production estimates.
The Government of India has launched the Sovereign Gold Bonds Scheme to reduce gold imports and lower trade deficits. Through this scheme, investors can purchase gold in demat or paper form and earn returns linked to gold prices as well as a 2-3% interest rate. The bonds can be sold on stock exchanges and used as collateral for loans. They provide an alternative to investing in physical gold while still offering similar benefits like capital gains tax treatment.
The document analyzes Newmont Mining Corporation's exposure to gold price fluctuations using regression analysis. It finds that NEM's stock returns are highly correlated with gold price changes, with about 1.2-1.3% increase or decrease in stock price for every 1% change in gold price. The document then discusses various hedging strategies NEM could employ using options contracts and gold futures to limit downside risks from potential gold price declines. It provides examples of how different hedging approaches could help reduce losses if gold prices dropped in the future.
The document discusses the Discounted Cash Flow (DCF) method for valuing investments. It covers key aspects of DCF including forecasting cash flows over different periods, calculating the weighted average cost of capital, and discounting future cash flows to determine present value. It also explains the differences between the debt-free and leveraged/equity DCF methods in terms of adjusting for a company's capital structure.
Monsanto - Free Cash Flow Model PresentationUsman Riaz
Analyzed the financial statements and the strategy of Monsanto (NYSE: MON) and built a free cash flow model for the company. The team presented and defended the key assumptions of the free cash flow model, as well as the fundamental value.
This document provides a valuation summary and analysis of Monsanto Company (MON). It estimates a bullish target price of $163.83 per share with a 70% probability based on discounted cash flow modeling. Key assumptions in the model include a recovery growth rate of 14% until 2018 followed by stable growth of 8.4%, a cost of equity of 17.61-17.96%, and a 30% dividend payout ratio. Historical financial data from 2008-2013 show sales, EBITDA, and EPS growth with improving margins over time.
This document provides an executive summary of Home Depot. It describes Home Depot as the largest home improvement retailer in the US, operating over 2,000 stores. It analyzes Home Depot using Porter's Five Forces model and finds low threat of new entrants due to high costs, and that Home Depot has power over suppliers due to large purchasing volumes. Financial analysis shows improving profitability ratios over 5 years. The conclusion is that Home Depot is performing well in a recovering housing market and economy, and is expected to see revenue growth of around 15-19% over the next 5 years.
The document provides a marketing plan for introducing Atlantis Water in the Twin Cities market of Pakistan. It includes research on customer preferences, competitors, and distribution networks. Key findings show that taste, brand image, and availability are most important. The top brands are Nestle, Aquafina, and Kinley. The plan proposes a selective distribution strategy initially, then intensive distribution. Marketing strategies will focus on the brand's key benefits of being purified through 14 steps and containing natural minerals. Positioning will emphasize Atlantis as the best choice for health-conscious customers. The implementation plan details promotional, advertising, packaging, and training activities to build brand awareness in the first year.
This document provides a marketing plan for Atlantis Water to commercialize their product in the Twin Cities market of Pakistan. It begins with an introduction and outlines the research methodology, which includes environmental scanning, primary research through consumer/retailer surveys and a perceptual mapping study. It then presents an analysis of the external environment through PESTEL and Porter's Five Forces. Next it analyzes research findings regarding consumer preferences, distribution channels, and competitors. It develops value proposition and positioning strategies. The marketing mix and branding strategies are then proposed, along with packaging recommendations. Finally, an implementation plan for the first year is presented.
Hewlett Packard - Fundamental Research ReportUsman Riaz
Compiled a fundamental analysis report of a company. Its past performance and stock price was evaluated and all other factors were assessed. P/E ratios, stock prices, Sales and SWOT analysis was performed. Value line sheet for the company was analyzed to calculate the future performance f the company and a recommendation was made to buy, hold or sell the stock.
Described the reasons that led to the financial crisis of Iceland. Gave an insight of the banking system and how it contributed to the downfall of the economy. Analyzed the Government's response and the role of IMF in the recovery. Also covered briefly how the recovery was going at that time and what were the challenges that Iceland faced in the near future
The Impact of Generative AI and 4th Industrial RevolutionPaolo Maresca
This infographic explores the transformative power of Generative AI, a key driver of the 4th Industrial Revolution. Discover how Generative AI is revolutionizing industries, accelerating innovation, and shaping the future of work.
Abhay Bhutada, the Managing Director of Poonawalla Fincorp Limited, is an accomplished leader with over 15 years of experience in commercial and retail lending. A Qualified Chartered Accountant, he has been pivotal in leveraging technology to enhance financial services. Starting his career at Bank of India, he later founded TAB Capital Limited and co-founded Poonawalla Finance Private Limited, emphasizing digital lending. Under his leadership, Poonawalla Fincorp achieved a 'AAA' credit rating, integrating acquisitions and emphasizing corporate governance. Actively involved in industry forums and CSR initiatives, Abhay has been recognized with awards like "Young Entrepreneur of India 2017" and "40 under 40 Most Influential Leader for 2020-21." Personally, he values mindfulness, enjoys gardening, yoga, and sees every day as an opportunity for growth and improvement.
An accounting information system (AIS) refers to tools and systems designed for the collection and display of accounting information so accountants and executives can make informed decisions.
STREETONOMICS: Exploring the Uncharted Territories of Informal Markets throug...sameer shah
Delve into the world of STREETONOMICS, where a team of 7 enthusiasts embarks on a journey to understand unorganized markets. By engaging with a coffee street vendor and crafting questionnaires, this project uncovers valuable insights into consumer behavior and market dynamics in informal settings."
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
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1. 1
CORPORATE FINANCIAL RISK
MANAGEMENT
PROF. JOUAHN NAM
PROJECT REPORT 1
CASE STUDY - NEWMONT MINING CO.
Prepared by:
Chunyang Tang
Reema Ayyoub
Efthymios Gkotsis
Usman Riaz
Zaki Kasim
2. 2
INDEX
1. NEM’s Exposure to Gold Price…….…………………..3
2. Should NEM Hedge?.......................................................4
3. Hedging Strategies and Related Payoffs………………5
4. Long Term Hedging Strategies…….…………………..8
5. APPENDIX……………………………………………...10
3. 3
1. NEM’s EXPOSURE TO GOLD PRICES
Methodology
In order to measure the NEM’s exposure to gold price change, we adopt the
similar Multiple Regression Model following Jorion’s paper (1990)1
.
RSi=β0+β1RGi+β2RMi+εi
Where RSi is the rate of return on company’s common stock, RGi is the rate of
change in gold price(GLD) and RMi represents the rate of change in market
index(S&P 500).
As for the time series selection, we decide to run both weekly and monthly
regression to examine the coefficients. The data for weekly regression ranges
from 12/31/2008 to 2/4/2013 and the monthly observations starts from 12/1/2004
to 2/1/2013. 2
Refer to Appendix 1 for Excel analysis
Weekly Results
After running the regression on 214 weekly observations (significant at 5% level),
we got:
R2
(Coefficient of determination)=48.8%, interpreting that almost half of the
variance can be explained by our model.
β1 (GLD return)=1.19, showing that the stock price of NEM is highly correlated
with gold price changes.
β2 (S&P 500 return)=0.45, which does not bring the same level of exposure as gold.
Correlation coefficient for Gold is statistically significant (P<0.05), whereas it
isn’t for S&P 500.
Monthly Results
As for the regression on 98 monthly observations,
R2
(Coefficient of determination)=54.9%,
β1 (GLD return)=1.31
β2 (S&P 500 return)=0.16
Correlation coefficient for Gold is statistically significant (P<0.05), whereas it
isn’t for S&P 500.
Conclusion
With outputs from both weekly and monthly regressions, we can say that NEM is
highly exposed to gold price changes. For every 1% increase (decrease) in gold
prices, it is highly possible to result in 1.2%-1.3% increase (decrease) in the
company’s stock price.
1 Philippe Jorion, 1990, The Exchange-rate exposure of US multinationals.
2 All sources come from yahoo finance.
4. 4
2. SHOULD NEM HEDGE?
Other than the obvious reason of gold price fluctuations, there are other risks that
need to be considered when taking this decision. First of all, NEM is at great risk of
losing control of its ownership on its operations in Batu Hijau, Indonesia due to
domestic conflicts. This will decrease its future inflow of gold and will have a sure
effect on its net income. Its sales from Batu Hijau were equal to $1,576 million in
2013. If the company hedged against the dropping gold price in 2013 it would have a
better chance of better running its operations in Indonesia. Hedging would allow for
extra cash flow to pay the extra taxes that the company is adding on the use of the
port. Furthermore, it would allow for building a facility for refining the copper further
to comply with the new export standards that the government has implemented.
Minimize Expected Tax
The company has a lot of tax carry forwards and tax breaks that it can only implement
if it has enough taxable income. The fluctuation of gold prices affects the company’s
ability to take advantage of all this because of certain restrictions and time brackets
that affect its taxable income. In addition, the U.S. tax system is moving from GAAP
to IFRS, which could adversely affect the company’s bottom line. As mentioned in
the 1985 paper by Smith and Stulz; “If hedging reduces the variability of pre-tax firm
values, then the expected corporate tax liability is reduced and the expected post-tax
value of the firm is increased, as long as the cost of the hedge is not too large.”
Underinvestment Problem
The final reason for hedging which is arguably the largest and had the most direct
effect on the losses the company incurred in 2013 is the write-downs the company
had to make. Their write-downs increased from $52 in 2012 to $4,352 in 2013. This
was primarily due to decrease in the company’s long-term gold and copper, rising
operation costs and the decreasing gold price assumptions. Furthermore the valuation
of the company as a whole was affected and therefore decreased in future cash flows
that forced the company to make even more write downs in its operations. Due to fair
value accounting standards, the company had to re-evaluate its operations based on
current prices in the market and downward predictions that the company and the
market expect, thereby devaluing a lot of assets and intangible assets such as
goodwill.
When the company does not hedge, it creates an underinvestment problem. By not
hedging, the company can lose control of its facilities. Most of the write-downs the
company had to make in 2013 and in previous years, when the gold price was not
favorable, is due to not hedging against the gold price. If the company hedged, it
would not have to make so many write-downs and that would decrease the amount of
capital it would have to put in again to the company when prices go up.
5. 5
3. HEDGING STRATEGIES AND RELATED PAYOFFS
A. Partial Hedging - Futures Contracts
The first hedging strategy that NEM could have followed was to hedge the gold price
in the futures market. This is more of a top-down approach where we hedge on the
basis of average production per year.
Precisely, assuming that the level of gold production in 2013 will remain
approximately the same as 2012, the company could have hedged its position by
shorting future gold contracts with 1-year to expiration. In this way they could have
‘’locked’’ a specific price for their future sales and kept the same level of revenues
between 2012 and 2013. By minimizing the revenues fluctuation NEM could have
saved a considerable amount of net income, lost by the huge drop in the gold price in
2013.
In order to simplify our analysis regarding the gold futures hedging position, we don’t
consider some key specs of these types of contracts, such as the initial futures margin,
the maintenance margin, the marginal calls and the daily settlement procedure for
simplicity. Moreover we assume that troy ounces equal to ounces and we neglect the
sales from copper and other metals since they only account for 8% of the company’s
revenues.
Methodology:
In 2012 Newmont Company had a consolidated gold production of 5.466 million
ounces, which was sold in the yearly-average price of $1,662/ounce and generated
revenues of $ 9.1 billion. Since the management team had estimated that the gold
prices would drop in 2013 by 10%-15% (MD&A, 10-K/2013), they could have at
least shorted a specific number of 1-year contracts that covers the gold production
sold in 2012 and has a settlement price of $1,662/ounce.
Following the worst case scenario, where gold price drops by 15% [Actual drop in
2013 was 16.18 % - Average price of gold realized in 2012 was $1,662/ounce-
Average price of gold realized in 2013 was $1,393/ounce], we can estimate the profit
that NEM could have realized by this hedging strategy:
-Drop in gold price in 2013- 15%. Gold price would have been approximately
$1,412/ounce
- By shorting future contracts with settlement price of $1,662/ounce, NEM could have
realized a profit of [($1,662/ounce)-($1,412/ounce)] $250/ounce.
-Since a gold future contract covers 100 troy ounces, the company could have realized
a profit of $25,000 per contract.
-In order for the company to cover the entire gold production of 2013, they need
5,466,000/100= 54,660 contracts
6. 6
-Total profit from the hedging position: 54,660* $25,000= $1.3665 bill
Comparing the results of the hedging strategy with the actual numbers of 2013, we
realize that the company could have achieved a partial hedging towards the drop of
the price of gold.
Conclusion
Precisely, in 2013 NEM experienced a Net loss of $ 2,462 million which was mainly
caused by the drop of the gold price and the write-down of two important facilities in
Nevada, US and Boddington, Australia. Had NEM hedged, they could have covered
the losses from the gold price fluctuation and a part of the expenses regarding the
write- down of the two facilities. The after-hedging estimated Net Loss would have
been approximately $1.1 bill, instead of $2.4 bill.
B. Full Hedging - Options Contracts
In this strategy, we consider the actual losses incurred in the company in 2013, taking
into consideration the fixed and the variable costs. By performing a sensitivity
analysis, we determine the strike price of the option, which would generate
approximately the same amount of gains as the losses incurred in the company, with
$1 drop in the gold price below the specified strike price.
Our reference year is 2012, and from the income statement and average gold prices
data for 2012, it is clear that at an average gold price of $1669/oz, the net income was
$1.809 billion. Similarly in 2013, at an average gold price of $1411/oz, the company
incurred a net loss of $2.462 billion. However, this loss was largely contributed by the
write-down of property, plant and mine development which was a total of 4.352
billion. Assuming that the company already knew about this expense at the beginning
of 2013, our strategy will aim at hedging this fixed cost as well in our analysis.
Methodology:
We perform a sensitivity analysis in the spreads created by change in gold prices with
the change in net income.
2012: @ $1669/oz net income = 1.809 billion
2013: @ $1411/oz net income = (2.462) billion
hence, total spread in gold price 1669-1411 = 258
total spread in net income 1.809 – (2.462) = 4.271 billion
therefore, the change in net income per dollar drop in gold price is:
4.271 billion/258 = 16.554 million.
This shows that for every dollar drop in gold price, net income would reduce by
16.554 million.
Strike Price: we decide the price at which the company breaks even in its net profits,
or in other words, has a zero net income. This is calculated as follows:
7. 7
16.554 million * x = 1.809 billion.
x = 1.809 billion/16.554 million = $ 109.28
This shows that a reduction of the average 2012 gold price by $109.28 would result in
the company’s break even net income.
From this analysis, we find our strike price to be:
2012 avg. gold price – 109.28 1669 – 109.28 = 1560 (approx.)
With this in mind, we opt for a LONG PUT option of the XAUUSD gold commodity
on Feb. 2013 expiring after 1 year, at a strike price of $1560. The main advantage of
this option price is its “out of moneyness” at initiation, making our cash outflow in
terms of premium much lower than “at the money” options.
Number of contracts:
Every drop in gold price below $1,560 should generate approximately $16.554
million as explained earlier.
Every contract generates $100 for every drop in price below the strike price, meaning
to generate $16.554 million, we need:
.
*Refer to appendix 2 and 3 for contract and payoff graph.
Since we are optimistic (or rather sure since the data is already available) about the
gold price to drop to about 1300 by the time of expiration on Feb. 2014 (*refer to
appendix 4 for gold price chart), we haven’t considered hedging for the premium
paid up front. Our intrinsic value of the option would be:
1560-1300-57 = $203/oz
Per contract: 203 * 100 = $20,300/contract
Total value of option: 20,300 * 165540 = 3.36 billion.
Net Profit: 3.360 billion – 2.462 billion = 898 million
To break even, we can find out the expected gold price to be as:
(1560 – x – 57) * 100 * 165540 = net loss in 2013 = 2.462 billion
breakeven spot price = $1,354.27/oz
Conclusion:
This method follows a bottom up approach for hedging strategy. Instead of
considering hedging for the expected average quantity of gold sold for 2013, we are
hedging the expected losses that are to be incurred for the fiscal year. This way, we
consider everything related to fixed and variable costs completely; by hedging for the
total income which technically considers all these factors.
8. 8
Trade off:
The payment of premium upfront for the option is an additional cash outflow for the
company, which is analogously affected by the money-ness of the option. The more in
the money, the more expensive the option would be. We chose a strike price fairly out
of the money to reduce the initial cash outflow, but at the same time, took a risk in
opting for such an “out of the money” option.
Risk premium,
Risk premium.
4. LONG-TERM HEDGING STRATEGIES
Hedging can increase the firm value in the short and long run. Hedging is a lot
simpler in short run compared to long run. The biggest problem that arises in planning
to hedge in the long run is the cost of hedging. The cost of the financial derivatives
increase significantly as they go beyond 1 year mark. So for our analysis of the
Newmont Mining Corporation’s long term hedging strategy we will prefer
Operational hedging over financial hedging.
As Chowdry and Howe (1999) suggest that firms are likely to use financial
instruments to a greater extent to hedge short term exposure and rely on operational
hedging more heavily to hegge long term exposure. But in other empirical studies
such as Allayannis , Ihrig and Weston (2001) and Kim, Mathur and Nam (2005), the
researcher concluded that the operational hedging can only be a compliment to
financial hedging and cannot substitute it. So as a long term strategy we have devised
a mix of operational hedging and financial hedging, but operational hedging being
more crucial due to its effectiveness and cost benefit in the long run.
Below are the hedging strategies that we will use .
Operational Hedging Strategies
A. Gold Loans
The best way to align your liabilities and revenues to take the gold or bullion loan.
This is a classic operational hedging strategy where the company can minimize the
risk of going into financial distress. This strategy would shield NEM from
experiencing gold rate exposure that could see their debt in dollars to elevate to
uncomfortable levels. So taking loans in gold or gold bullions in the future can be a
big risk minimizing strategy.
9. 9
B. Diversification
Diversification is another operational hedging strategy where NEM can benefit. NEM
can look into expanding into its copper production and reduce the gold production
percentage, currently at 80%, to a more moderate number. We think this strategy is a
difficult one to implement in the short run and it needs some time to be effective. Still
as an operational hedging strategy we will recommend NEM to slowly diversify into
more areas as well.
Financial Hedging Strategies
Futures Contracts
As we agree that financial hedging and operational hedging complement each other,
we will also use futures contracts. Futures contracts minimize the loss in case of a
price drop. The futures contract obligates the buyer to buy at a set price and date. So
NEM can mitigate the risk of loss by going into a futures contract and setting the
price for the sale. The benefit of using futures contract is that NEM can hedge its sales
and avoid the hefty premiums that it would have to pay if it went for options to hedge.
As far as other financial derivatives like options are concerned, we don’t plan to use
them as a long term hedging strategy. The premiums on options for a 1 year plus
period are huge and it is financially unwise to buy the options. We will be using those
financial derivatives as an insurance policy in the short term. But for the long term we
will be confining a mix of the three strategies stated above.
10. 10
APPENDIX
1. NEM’s EXPOSURE: REGRESSION ANALYSIS RESULTS
SUMMARY
OUTPUT
Regression Statistics
Multiple R 0.698515559
R Square 0.487923986
Adjusted R Square 0.483070185
Standard Error 0.033310545
Observations 214
ANOVA
df SS MS F
Significance
F
Regression 2 0.223081559 0.111541 100.5241 2.16164E-31
Residual 211 0.234124 0.00111
Total 213 0.457205559
Coefficients Standard Error t Stat P-value
Intercept -0.003464572 0.00230499 -1.50308 0.134315
GLD Return 1.194564312 0.097813155 12.21272 2.7E-26
S&P 500 Return 0.445486765 0.085715557 5.197268 4.76E-07
-0.20
-0.15
-0.10
-0.05
0.00
0.05
0.10
0.15
0.20
-0.2 -0.1 0 0.1 0.2
NEMReturn
GLD Return
Weekly GLD Return Line Fit Plot NEM Return
Predicted NEM
Return
11. 11
2. OPTION CONTRACT – VANILLA: XAUUSD
-0.4
-0.3
-0.2
-0.1
0
0.1
0.2
0.3
0.4
-0.4 -0.2 0 0.2 0.4
NEMReturn
GLD Return
Monthly GLD Return Line Fit Plot NEM Return
Predicted NEM
Return