Which US presidential candidate does gold prefer?
Gold loves chaos and should be hitting new highs, especially with inflation coming down and with it, two rate cuts likely before year’s end.
Canada’s Northgate Minerals reported a wider quarterly net loss of $13 million hit by lower production and higher costs, and it lowered its full-year production forecast. Revenue fell 45% to $67.4 million.
In July, Northgate Minerals said it would buy Primero Mining to form a new mid-tier gold producer, which will have a combined market capitalization of approximately $1.2 billion and will tie together the San Dimas mine in Mexico; the Fosterville and Stawell gold mines in Australia; and the Young-Davidson gold development project in Ontario.
Investors shrugged off the news and the Vancouver-based company’s shares opened barely changed in Toronto at C$3.15 on Friday giving it a market valuation of some $920 million.
Goldcorp, which controls 35.5% of the outstanding shares of Primero, agreed to vote its shares in support of the merger. When the agreement is completed, Goldcorp will receive 46.7 million Northgate shares representing approximately 11% of Northgate’s outstanding shares. The new company will be led by Joe Conway, current President and Chief Executive Officer of Primero.
Reuters reports Gold production declined 36 percent to 43,798 ounces, at an average cash cost of $944 per ounce. In the year-ago quarter, cash cost was $693 per ounce. For 2011, the company expects total production of 190,000-200,000 ounces at a cash cost of $825-$860 per ounce. It had earlier forecast 2011 production of 195,000-205,000 ounces, at a cash cost of $805-$845 per ounce.
