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Six Canadian miners among PwC Top 40 list

Friday, July 24th, 2020

Six Canadian mining companies have made the global top 40 list, reporting a net profit margin of 19%, compared with an average of 9% for world’s 40 biggest miners, consultancy PricewaterhouseCoopers (PwC) reports.

Gold miners dominate Canada’s presence on the list, with four of the Canadian companies focused on that sector.

 Among the notable movers was Kinross Gold, which returned to the top 40 for the first time in several years after reporting increased revenues, earnings and margins in its 2019 results.

With a healthy gearing ratio of 21% for the Canadian companies, compared with a 31% average gearing ratio for others in the top 40, it demonstrates their solid financial foundation, PwC notes.

 Topping the list of Canadian companies was Barrick Gold, which ranked ninth – up from eleventh in 2018, while Agnico Eagle Mines saw the largest jump, rising to seventeenth from twenty-fourth in 2018.

Agnico Eagle benefited from higher gold sales volumes as two new deposits in Nunavut came into commercial production in 2019.

For Canadian miners, PwC says that mergers and acquisitions continue to offer opportunities to attract capital and help companies emerge stronger from the Covid-19 pandemic.

Of five megadeals noted in PwC’s recently published ‘Global Mine 2020’ report, four involved Canadian companies, the largest being Newmont’s acquisition of Goldcorp, and Kirkland Lake Gold’s purchase of Detour Gold.

Even as megadeal activity slowed recently, the largest transaction so far in 2020 also involved two Canadian-listed companies: SSR Mining’s proposed $2.4-billion merger with Alacer Gold, which will merge two companies with mines in four jurisdictions to create a diversified portfolio.

“Canadian miners have shown resilience over the past year, doing more to deal with cybersecurity threats and making environmental, social and governance (ESG) factors a top priority,” PwC notes.

The consultancy adds that there is a reputational advantage with key stakeholders, including investors, increasingly finding ESG performance to be a leading guidepost for investment decisions.

“The strong performance of Canada’s largest mining companies in 2019 speaks to their continued progress in recent years,” comments PwC Canada national mining leader Kevin Chan.

He points out that while this year will be challenging, miners’ resilience should help them manage through the coming months and position them to make investments needed for long-term success.

PwC forecasts a 6% year-on-year decrease in revenues for 2020 to $649-billion and ultimately a 15% year-on-year decrease in profits to $51-billion.

Revenues for the world’s 40 largest mining companies rose 4% year-on-year to $692-billion in 2019. Earnings before interest, taxes, depreciation and amortisation were flat at $168-billion for the top 40 miners last year, while dividends paid rose 25% and market capitalisation was up 19% to $898-billion.

https://www.miningweekly.com/article/six-canadian-miners-among-pwc-top-40-list-2020-07-23
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