* Dividend increases drive gains in Kinross, Agnico shares
* Market applauds exploration successes at Barrick, Goldcorp
* Barrick shares close up 1 pct, Goldcorp shares rise 4.5
By Euan Rocha
TORONTO, Feb 16 Canada's big gold miners
reported uneven results this week but two dividend increases and
successful exploration programs helped spur gains in their
shares on Thursday.
Sharp dividend increases drove big gains in shares of
Kinross Gold and Agnico-Eagle, even though both
gold miners booked massive asset impairment charges in their
quarterly results late on Wednesday.
Shares of the country's two biggest gold miners, Barrick
Gold and Goldcorp, also rose but by a smaller
margin, as both reported solid quarterly results and continued
success in adding to their gold reserves through exploration.
Kinross and Agnico were among the top gainers on the Toronto
Stock Exchange, with Kinross ending the day up 7 percent at
C$11.07, and its smaller rival Agnico closing 7.2 percent higher
The stocks of both Kinross and Agnico have been under
pressure for months, largely due to operational problems and
cost overruns. Shares of Kinross had fallen 36 percent over the
last six months, while those of Agnico slid 46 percent in the
As it signaled in January, Kinross booked a huge $2.94
billion noncash goodwill impairment charge related to its
acquisition of the Tasiast and Chirano mines in West Africa. It
acquired the gold mines in its $7.1 billion takeover of Red Back
Mining in 2010.
However, the company announced a 33 percent increase in its
semi-annual dividend payout. The new dividend will be 8 cents a
share, payable to shareholders on March 31.
Agnico, which has similarly been plagued by operational woes
at its Meadowbank mine in the Canadian Arctic, booked a partial
writedown on the value of the asset.
The writedown capped a tough year for Agnico, which last
October was forced to write off its investment in its Goldex
mine in Quebec after the mine was shut down due to water inflow
and ground stability concerns that made operating there unsafe.
Still, Agnico said its board signed off on a 25 percent
increase in its quarterly dividend, lifting the payout to 20
cents a share.
The dividend increases were one of the factors that drove
the big gains in Agnico and Kinross shares, said Morningstar
analyst Joung Park.
"Agnico also took this opportunity to empty all the
skeletons out of the closet because they knew it was going to be
a bad quarter and a bad year, so they took the writedown and
lowered guidance," he said. "It decreases the uncertainty and it
removes the overhang of negative surprises going forward, as
their intermediate-term guidance looks very reasonable now."
MAJORS STAY THE COURSE
Shares of Barrick, the world's largest gold miner, ended the
day up 1 percent at C$48, while those of Goldcorp closed 4.5
percent higher at C$47.25 a share.
Vancouver-based Goldcorp said its proven and probable gold
reserves increased 8 percent to 64.7 million ounces in 2011,
while its measured and indicated gold resources rose 10 percent
to 28.2 million ounces.
"We see continued opportunity for growth in the existing
reserve base and I believe we have the opportunity to more than
replace reserves when we calculate them at the end of 2012,"
Chief Executive Chuck Jeannes said in an interview.
Goldcorp reported a 23 percent increase in operating profit
on Wednesday, topping expectations, as sharp gains in the price
of bullion drove quarterly earnings growth.
Although Barrick's fourth-quarter profit failed to meet Wall
Street's expectations, analysts were pleased with the company's
continued success in its exploration program.
The Toronto-based gold miner said it was able to replace
proven and probable reserves in 2011, keeping them just shy of
the 140 million ounce mark, the largest gold reserve base in the
Barrick said it is continuing to enlarge its resources
through new discoveries in Nevada: Goldrush and Red Hill. It has
confirmed that the two deposits - now named the Goldrush complex
- are a part of one large deposit with mineralization stretching
over five kilometers (3 miles).
"Our growing high grade gold discovery in Nevada, Red
Hill-Goldrush, clearly demonstrates the value that a focused and
disciplined exploration program can create" said Chief Executive