We’re waiting on a gold rebound with this Top Pick.
Top Pick Update
Goldcorp (GG)
From Adrian Day’s Global Analyst
After a strong start to the year, Goldcorp (GG) has slipped, with its year-to-date performance more-or-less in line with the benchmark XAU index.
Its results have offered promise, beating expectations on improved operations (including at two new mines which had experienced start-up problems); lower costs; and higher profits. But the company also made an entry into large but difficult undeveloped projects in the high Andes. In a series of rather complicated transactions, it will be in joint-venture with Barrick Gold in two large projects, paying $260 million up front with various contingency payments. One of these projects, Cerro Casale, has been in Barrick’s hands since 2007, ready to proceed for years, yet no timeline has been announced. For Goldcorp, struggling already, to buy a minority stake in difficult and likely far-off projects, raises questions.
Because the gold miners are depressed right now, we will hold for now; Goldcorp should respond positively when the sector rebounds.
Adrian Day, Adrian Day’s Global Analyst, www.adriandayglobalanalyst.com, 410-224-8885, June 20, 2017