Comparing the results of labor and gold miners inflation
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(Reuters) – Rising labor costs and sticky inflation could continue to weigh gold miners’ profits in 2025, analysts said, but will raise prices for yellow metal And free cash flow should still increase.
Gold prices rose nearly 27% in 2024, the biggest since 2010, and this year it rose to an all-time high. (gol/)
Analysts at Bank of America said that within that range, companies generated around $3 billion in free cash flow in the fourth quarter, with more expected in 2025.
However, higher costs could strain revenue, which caused both Newmont and Barrick to miss out on estimates in the third quarter.
“I think we’ll still be rolling out our inflation stories next year or so,” said Sarah Tomlinson, director of mining supplies at consulting firm Metals Focus, and workers are one of the biggest costs for miners. He added that there is.
Newmont missed out on third quarter profit estimates. All-in-in Sustaining Costs (AISC), an industry indicator that reflects total costs, has increased nearly 13% from the same period last year.
Similarly, Barrick saw AISC rise by nearly 20%.
Few people are looking for a mining career, according to Ross Embleton of Metal Focus’ Mine Supply Research Analyst.
Barrick is scheduled to report an adjustment of 41 cents per share for the fourth quarter on Wednesday, according to LSEG data. The company said in January that it had “not produced preliminary production results.”
Bank of America analysts said that Canadian miners have disagreements with royal disagreements with the Marian militia at the Ruro Goncoto mine and the “very challenged lamp at the Dominican Pueblo Viejo mine. With the backdrop of opposition to the royal family, we hope to miss out on the 2024 gold production guidance slightly. Republic.
“We assume that the (Rulo Gunkoto) mine will rise to full production in 2026E in late 2025E and will eventually restart in late 2025E under economic conditions that are less favorable for Barrick,” the securities firm said. I mentioned it in my January memo.
Mali accounts for 14% of Barrick’s gold production, generating $949 million in revenue from its operations in the first nine months of last year.
Newmont plans to report an adjustment of $1.09 in earnings per share on February 20, according to LSEG data.
Scotiabank analysts say that it could increase the sale of assets and cash dividends from higher gold prices, but it would need to be balanced by a stock buyback program.