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What’s Affecting Analysts’ Revenue Forecasts for Gold Miners?

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Analysts’ forecasts

In the previous article, we looked at analysts’ ratings for senior gold mining companies. In this article, we’ll consider analysts’ estimates for these companies’ (GDX) (JNUG) revenues going forward.

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Analysts’ revenue expectations

As per the consensus estimate compiled by Thomson Reuters, analysts expect Barrick Gold (GOLD) to see revenue of $2.1 billion in the first quarter of 2019, implying potential rises of 9% sequentially and 16% YoY (year-over-year), mainly because of Barrick’s merger with Randgold, which completed on January 1, 2019. Without this merger, Barrick’s production profile was in a state of decline.

Analysts expect Newmont Mining’s (NEM) revenue to rise 1.5% YoY to $1.84 billion in the first quarter of 2019. Its merger with Goldcorp (GG) is expected to complete in the first quarter of 2019, which should provide upside to its production, driving its revenue going forward.

Kinross Gold and Goldcorp

Kinross Gold’s (KGC) revenue estimate for the first quarter of 2019 is $794 million, implying a potential YoY fall of 11%. Its production guidance suggests a 6.4% YoY fall in its production. The company has guided for lower production in the first quarter compared to the rest of the quarters of 2019 due to the expected ramp-up at its Bald Mountain Vantage Complex and lower production at Fort Knox due to the operation’s mining and milling strategy.

Analysts expect Goldcorp (GG) to report revenue of $856 million in the first quarter of 2019, implying a rise of 1% from the first quarter of 2018. Goldcorp also expects its production to increase progressively in each quarter after the first, as grades and recoveries should climb at Peñasquito due to the completion of its multiyear waste-stripping campaign. Its Pyrite Leach project is also now fully commissioned and has completed a full year of operations.

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