[miningmx.com] — THE gold groups will shortly start reporting results for the September quarter, and according to a preview by JP Morgan Cazenove, the numbers should show a “substantial boost’ in earnings.
Analysts Steve Shepherd and Allan Cooke said the average gold price received in the September quarter was a record R391,250/kg as the dollar gold price rose 13% to $1,702/oz (June quarter: $1,506/oz) and the rand depreciated 5.5% to R7.15/$1 (R6.78/$1).
The spot rand gold price is currently sitting around R423,000/kg, reflecting further weakness in the rand since the beginning of October, which has more than offset the pull-back in the dollar gold price to present levels around $1,640/oz.
“A week-long strike in South Africa and wage increases of around 9% from July 1 will take the shine off local gold mines’ operating performance somewhat,” said the analysts.
“Nevertheless, a record received gold price and slightly improved production are expected to substantially boost September quarter core earnings for the gold miners that we cover.
“We continue to see widening free cash flow margins as a catalyst for improved gold stock ratings so we are of the view that gold shares should outperform the ETFs (exchange traded funds) through the re-rating that we foresee.’
JP Morgan has forecast that AngloGold Ashanti will increase its adjusted headline earnings per share by 21% to 728c in the September quarter (June quarter: 601c).
The firm also expected Gold Fields to push up net earnings per share “ex items’ by 47% to 270c (184c) while Harmony is forecast to more than double its headline earnings per share to 70c (30c).
Turning to DRDGold the analysts forecast that headline earnings per share would double to 16c (8c).
