TORONTO – Agnico-Eagle Mines is now among the top three gold miners in North America based on market capitalisation, as erstwhile industry darling Goldcorp tumbled 18% Thursday on a “miserable quarter.”
The three largest gold miners on the continent are Newmont Mining at $15.7-billion, Barrick Gold at $14.7-billion and Agnico-Eagle at $8.3-billion. Goldcorp comes in fourth with a market cap of $7.4-billion. Credit Suisse Group analyst Fahad Tariq noted that Agnico-Eagle is “a top pick for its exploration and project pipeline, strong balance sheet, high quality asset base and track record.”
Barrick Gold remains at the top thanks to it pending merger with Randgold Resources. The market has clearly rewarded the company for its strategy, as Barrick’s market-cap had mostly trailed or matched Goldcorp’s over last 12-months. Deutsche Bank analyst Chris Terry wrote that the deal could lead to improved production for the short-to-medium term.
Goldcorp’s historically higher valuation had been based on company’s ability to generate steady growth. However, a difficult third-quarter may have dented that reputation, so the company will need to regain investors’ confidence by delivering on its guidance for the last three months of the year.
Richard Gray of Cormark Securities in Toronto downgraded Goldcorp to market perform from buy, saying that he will “need to see sustained operational improvement before the premium multiples can be ascribed again.”