Market cheers as Canada gold miners boost divs, reserves

Thu Feb 16, 2012 5:43pm EST
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By Euan Rocha

TORONTO (Reuters) - 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 (K.TO: Quote) and Agnico-Eagle (AEM.TO: Quote), 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 (ABX.TO: Quote) and Goldcorp (G.TO: Quote), 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 at C$36.57.

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 same period.

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.   Continued...