Barrick’s high debt
Barrick Gold’s (ABX) high debt has been a major concern for investors. It repaid $250 million until 2Q15. As of 2Q15, combined with asset sales and already repaid debt, Barrick is close to nearly 90% of its reduction in the debt target of $3 billion. Assuming it pays down $3 billion on its debt this year, Barrick will still have $9.5 billion in long-term debt. However, its near-term debt repayment schedule is shrinking. It’s in the process of the redemption of 2016 notes. Then, it will have less than $250 million in debt due before 2018.
Prepaying debt and strengthening its balance sheet is Newmont Mining’s (NEM) top priority. It plans to repay $750 million in 2015. Out of the target for 2015, $275 million has already been paid in the first half of the year. During the earnings call, management maintained that it remains on track to pay down more debt during 2015. As of June 30, Newmont had $6 billion in cash and cash equivalents, marketable securities, and revolver capacity. The company doesn’t have any significant debt due until 2019. It maintains an investment-grade rating.
Goldcorp comfortable financially
Goldcorp (GG) is comfortable as far as its debt position is concerned. It repaid $305 million in debt during 2Q15. Goldcorp’s liquidity is also comfortable at $3.2 billion. This includes $940 million in cash and cash equivalents as well as $2.16 billion of an undrawn revolving facility. Goldcorp also extended its credit facility from $2 billion to $3 billion during 2Q15. The company’s management noted during the call that through the application of proceeds from the stake sale in Tahoe Resources (TAHO) in the third quarter, the drawn amount on its revolver should be down to zero. This should leave the company with only long-term debt of $2.5 billion. The first scheduled repayment for the debt is in 2018.
Kinross Gold’s (KGC) balance sheet is in good shape. On June 30, 2015, it had $2.5 billion in liquidity including $1 billion in cash. It’s also on a steady path to debt reduction. So far, it has repaid $30 million of its total target of $60 million for the year. The maturities on its loans have also been extended by a year from 2019 to 2020. This provides additional financial flexibility.
Yamana Gold’s (AUY) balance sheet also has significant flexibility. There are modest debt repayments over the short to medium term with only $118 million in principal repayments over the next two years. It had cash of $119 million and $260 million in revolving credit facility on June 30, 2015.
In the next part of this series, we’ll see these companies’ liquidity profile.