Gold Metals Report Q2 2016

Gold Metals Report Q2 2016

BMI View: Gold prices will prove resilient in 2016 due to a dovish shift in global monetary policy andelevated systemic financial sector risks. However, we do not foresee a sustained multi-year recovery and themining sector will thus remain under significant stress. We forecast slowing mine production growth andincreasing consolidation.

Price Forecast:

We have raised our gold price forecasts for 2016 to USD1,150/oz from USD1,000/oz. A recalibration ofexpectations for the global monetary policy trajectory by investors, and equity market turmoil, havecombined to create a more positive environment for gold prices than we previously anticipated.

Mine Production:

Global gold production growth will slow, as miners ramp up divestment and consolidation to adjust tostructurally lower gold prices. The DRC will remain a growth bright spot, supported by low productioncosts and rising demand from key Asian markets.

In addition to weak prices, falling ore grades will drive up production costs, requiring miners to extractmore rock to maintain levels of gold output. For instance, US 2015 gold production declined largely dueto lower ore grades at Barrick Gold's Cortez and Goldstrike mines. While technology continues topartially offset this trend, in many markets production costs will increase due to tightening regulationsand rising labour and energy costs.

Gold miners will ramp up divestment and merger and acquisition (M&A) activity as firms seek to shedhigh-cost assets or form joint-ventures to better withstand the low price environment over the comingquarters. Given the weak price environment, the wide range of performances across the gold miningsector provides opportunities for well-positioned firms. For instance, global gold mining M&A andinvestment over the last 12 months totals USD17.3bn, with Canadian firms driving significant activity.

BMI Industry View
Table: BMI Gold Forecasts
Price Forecast:
Mine Production:
Price Forecast
Gold: Upward Revision On Monetary Policy Shift
Table: BMI Gold Forecast
Mine Supply: Gold Ore
Global - Gold: Miners To Adjust To Structurally Lower Prices
Table: Global - Key Gold Projects
Table: Global Gold Mine Production Forecasts (moz)
Competitive Landscape
Table: Largest Listed Gold Producers By Market Capitalisation
Company Profile
Global Company Strategy - AngloGold Ashanti - Q2 2016
Latest Results
Table: AngloGold Ashanti - Key Financial Data
Barrick Gold - Q2 2016
Company Strategy
Latest Results
Table: Barrick Gold - Key Financial Data
Address Details
Table: Freeport McMoRan - Key Financial Data
Newmont Mining
Table: Newmont Mining - Key Financial Data
Global Company Strategy - Randgold Resources - Q2 2016
Latest Financial Results
Table: Randgold Resources - Key Financial Data
Data Appendix
Table: BMI Gold Forecasts
Table: Gold Mine Production Forecasts

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