TEXT-S&P rpt says 4 Cdn gold miners to boost returns

Tue Dec 18, 2012 9:36am EST

Dec 18 - Rating volatility is emerging in the gold mining industry, as companies struggle to improve returns that lag high gold prices, said a report today published by Standard & Poor's Ratings Services.

"Despite favorable prices and strong operating cash flows, our rating actions have generally been negative for the industry in 2012 because of rising costs and higher debt burdens," said Standard & Poor's credit analyst Donald Marleau.

This commentary entitled, "Four North American Gold Miners Struggle To Extract Better Returns From High Prices," examines how four Canadian gold companies--Barrick Gold Corp., Goldcorp Inc., Kinross Gold Corp., and Newmont Mining Corp. --are coping in an environment that sometimes requires that they take on new levels of debt to fund large, risky investments or acquisitions to increase--or even merely sustain--gold output.

Standard & Poor's outlines the key rating factors and sensitivities for these four companies, which range from exposure to volatile metals prices and costs, to socio-political risks, to high debt loads.

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