EbeneNews – AU – Golden windfall heads for investors, miners swear restraint


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    Gold companies pledge to provide investors with more of the boom in soaring prices, without losing the budgetary discipline that falls to the sector

    Even as bullion rebounds to near record highs, helping to boost cash flow and miners’ stock prices, the mood – at least virtually – at the Denver Gold Group’s annual conference in the Americas this week was noticeably cautious The tone was exemplified by executives, including Agnico Eagle Mines CEO Sean Boyd, who put it this way: “Now is not party time”

    “Now is not the time to blow up capital budgets and introduce risk,” Boyd said in a presentation “Our vision is to keep risks low, to keep the count back to equities and focus on harnessing the current price of gold to generate that free cash flow and return it to shareholders “

    The gold industry fell into a dark phase about ten years ago after disastrous acquisitions and overexpansion of inflated balance sheets and prompted general investors to rush elsewhere Although the sector has since restored a large measure of fiscal discipline, there are still concerns that the restriction will quickly dissipate if gold prices remain high

    Always sing
    The memory of deals that went awry in the last cycle still lingers in the minds of many investors.These include the multi-billion dollar acquisition by Barrick Gold in 2011 of copper producer Equinox Minerals Barrick saw debt swell and took a $ 3 billion depreciation on the Zambian mine it bought after the cycle top purchase

    Major gold producers indicated at Denver Gold this year that they remember the lessons of the recession, said Rick Rule, CEO of Sprott US Holdings

    “The last decade has been marked by a lot of idiocy, and I think investors and managers of larger companies have come to understand that,” Rule said Tuesday in a telephone interview. For at least a while, he expects “new investments in terms of bringing a project into production or making acquisitions to be measured against returns of capital to shareholders”

    Amid rising gold prices, Barrick CEO Mark Bristow said his company is considering a more formal structure for its dividend policy The timing will depend on its net cash position and the evolution of the global pandemic, he said in a live presentation He also said the global miner intends to maintain a minimum cash balance

    “You don’t want to be held ransom by the financial markets,” said Bristow “So you have to be able to handle crises in the full cycle of the price of gold”

    Of course, different companies in the industry will have different priorities for the free cash flow that is expected to flow.For Franco-Nevada, a royalty and streaming company, the plan is to spend most of the money to acquire more deals, CEO Paul Brink said in a presentation in Denver “And then, obviously, the second use is to pay dividends”

    Whatever Franco does, the question is pleasant in all respects “It’s always a high class problem: discussing what to do with your money,” Brink said with a smile

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    EbeneNews – AU – Gold windfall heads for investors, miners swearing restraint

    SOURCE: https://www.w24news.com/news/ebenenews-au-golden-windfall-heads-for-investors-miners-swear-restraint/?remotepost=324781

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