|By Marketwire .||
|November 2, 2012 08:20 AM EDT||
NEW YORK, NY -- (Marketwire) -- 11/02/12 -- After a solid start to the year, gold mining stocks have struggled of late. The Market Vectors Gold Miners ETF (GDX) is down more than 4 percent over the last month, while the Market Vectors Junior Gold Miners ETF (GDXJ) has crumbled more than 5 percent over the that period. Five Star Equities examines the outlook for companies in the Gold Industry and provides equity research on Eldorado Gold Corp. (NYSE: EGO) (TSX: ELD) and Kinross Gold Corp. (NYSE: KGC) (TSX: K).
Since the end of June until now gold stocks have begun to outperform bullion. Over that time period the S&P/TSX Global Gold Index has gained 12 percent, while gold futures in New York have gained roughly 6.7 percent. Shares of major gold companies such as Goldcorp Inc. and Agnico-Eagle Mines Ltd. have surged recently as earnings have beat profit estimates as a result of lower costs and higher cash flow.
"The gold shares are starting to outperform the gold price," David Christensen, CEO of ASA Gold and Precious Metals Ltd. "As the companies begin to tighten their operating constraints and generate more cash flow; we're seeing some of that turnaround in the valuations in the industry."
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Eldorado Gold is a Canadian international gold producer with operations in China, Turkey, Brazil, Greece and Romania. The company plans to produce approximately 1.7 million ounces of gold annually by 2016. For the third quarter of 2012 the company reported gold production of 169,565 ounces. Credit Suisse analysts have maintained an "outperform" rating on the company and $20 target price.
Kinross is a Canadian-based gold mining company with mines and projects in Brazil, Canada, Chile, Ecuador, Ghana, Mauritania, Russia and the United States. As of December 31, 2011, Kinross' total estimated proven and probable mineral were 62.6 million ounces of gold. The company recently announced that Tony S. Giardini will become the new Executive Vice-President and Chief Financial Officer. Kinross is scheduled to release their third quarter results on November 8, 2012.
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