The Globe and Mail reports in its Tuesday edition investors are losing confidence
gold miners will be
able to weather the current price
slump without damage
to their credit ratings.
A Blomberg dispatch to The Globe says Barrick Gold's 4.1 per cent notes due
May, 2023, have fallen to $96, a decline of $3 since last
week (all figures U.S.).
"I would be a seller across the
board," said Matt Zabloski at North Vancouver-based Delbrook Capital
Advisors.
"You'd be crazy to buy the
bonds, given the current market."
In a country that is home to
more than half the world's gold
companies, producers such as
Barrick and Kinross Gold are working to keep investors as
they seek to cut costs and bolster
profit. Kinross's 5.95 per cent
notes due March, 2024, fell $3 to
$94 last week.
The price continued its slide Monday, closing
at $1,169.80, down $1.80. Goldcorp and
Yamana Gold reported surprise
net losses.
Barrick and Kinross, which
both have investment-grade ratings,
are trading as if they are rated
junk.
If gold prices sink below $1,100
an ounce and stay there, producers
including Barrick, Iamgold
and Kinross may be downgraded
by Standard & Poor's, the
ratings company said last week.
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