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SECOND QUARTER: Losses still plague Canadian miners



This is the season of quarterly reports (one of four times annually), but importantly the end of June marks the mid-point of 2016. From the results so far, this year is going to be an exceedingly difficult one in which to avoid losses.

Most of the companies in the table below lost money in the second quarter, none more so than Suncor’s oil sands business. Revenue fell more than 60% during Q2 2016 compared to the same period a year earlier. Not that Suncor did anything wrong, but its oil sands operations were interrupted for half of the quarter by monstrous  forest fires that required the evacuation of 90,000 people. Fortunately for Suncor and other oil sands producers, the fires did not reach their production sites.

Many of the gold producers on the list fared a bit better as the price of the yellow metal rose significantly to US$1,320.75 at the end of June, up roughly 9% since the end of March. The second quarter gains followed a first quarter jump of 14% over its Jan. 4 price of US$1,082.25. Detour Gold, Kinross and Goldcorp recorded losses.

If you are a producer of base metals or uranium, expect losses to continue.

With the first half of the year being so difficult, Canadian miners will probably finish up with the same problems – low commodity prices, reduced revenues, and losses.

If any readers can find reasons to be more optimistic, please share them in the comments below.

Selected Canadian mines Q2 and 1H 2016 results

  Three months to June 30    

Six months to June 30

 
  2016 2015 2016 2015
Agnico Eagle Mines        
         Gross revenue US$537.7 US$510.1 US$1,028.2 US$993.7
         Net earnings (loss) US$19.0 US$10.1 US$46.8 US$38.8
Barrick Gold        
         Gross revenue US$2,012.0 US$2,231.0 US$3,942.0 US$4,476.0
         Net earnings (loss) US$138.0 (US$9.0) US$55.0 US$48.0
Cameco        
         Gross revenue C$466.0 C$565.0 C$875.0 C$1,130.0
         Net earnings (loss) (C$137.0) C$88 (C$59.0) C$79.0
Capstone Mining        
         Gross revenue US$100.2 US$112.5 US$226.5 US$215.4
         Net earnings (loss) (US$13.4) US$1.3 (US$26.2) (US$16.0)
Centerra Gold        
         Gross revenue US$161.6 US$146.8 US$234.8 US$359.4
         Net earnings (loss) US$2.9 US$21.9 US$21.0 US$62.6
Detour Gold        
         Gross revenue US$166.7 US$163.0 US$145.7 US$142.4
         Net earnings (loss) (US$30.7) US$27.6 (US$40.8) (US$44.3)
First Quantum Minerals        
         Gross revenue US$659.0 US$558.0 US$1,379.0 US$1,160.0
         Net earnings (loss) US$142 (US$97.0) US$190.0 (US$187.0)
Goldcorp        
         Gross revenue US$753.0 US$1,188.0 US$1,697.0 US$2,205.0
         Net earnings (loss) (US$78.0) US$392 US$2.0 US$305.0
Hudbay Minerals        
         Gross revenue US$247.0 US$150.9 US$500.6 US$279.6
         Net earnings (loss) (US$5.7) (US$45.8) (US$21.5) (US$64.1)
Kinross Gold        
         Gross revenue US$876.4 US$755.2 US$1,659.0 US$1,546.6
         Net earnings (loss) (US$25.0) (US$83.2) US$10.0 (US$89.9)
Lundin Mining        
         Gross revenue US$342.3 US$501.3 US$711.9 US$1,032.8
         Net earnings (loss) (US$791.2) US$46.4 (US$813.3) US$118.1
New Gold        
         Gross revenue US$180.3 US$ 167.7 US$334.8 US$336.6
         Net earnings (loss) (US$8.8) US$9.4 US$18.0 (US$34.4)
Potash Corp. of Saskatchewan        
         Gross revenue US$1,053.0 US$1,731.0 US$2,262.0 US$3,396.0
         Net earnings (loss) US$121.0 US$417.0 US$196.0 US$787.0
Suncor (oil sands only)        
         Gross revenue C$810.0 C$2,204.0 C$2,395.0 C$3,981.0
         Net earnings (loss) (C$1,063.0) (C$44.0) (C41,587.0) (C$190.0)
Taseko Mines        
         Gross revenue C$ 55.1 C$92.8 C$113.3 C$147.8
         Net earnings (loss) (C$19.4) C$4.0 (C$37.8) C$6.0
Teck Resources        
         Gross revenue C$1,740.0 C$1,999.0 C$3,438.0 C$4,023.0
         Net earnings (loss) C$3.0 C$79.0 C$21.0 C$143.0