Credit Benchmark cover more than 500 mining companies, many of them unrated by the main agencies. This data is now available on Bloomberg. Contact us for more info and a free coverage check.
The gold price, moribund for years, is up about 8% over the past month, and major gold mining ETFs are up by even more. Other precious metals have also spiked. The Russian invasion of Ukraine, coming on top of existing inflation fears, is now changing the dynamics of the bullion market. RCB FX reserves are frozen, leaving domestic gold holdings to meet short term cash needs – if there are any international buyers. Oligarch sanctions and Rouble collapse mean a spike in Russian crypto demand, while gold is regaining its role as a portable and physical store of value in a collapsing economy.
Russia is also one of the world’s largest gold producers. And while sanctions triggered huge equity sell-offs in UK-listed Russian mining stocks – Evraz and Polymetal down more than 60% in a week – some producers will continue to function despite growing legal and logistical difficulties.
Outside Russia, metal miners are seeing windfall profits. Many of these firms were already strong credits, but some of the weaker credits could see their fortunes transformed by a sustained rise in precious metal prices. Figure 1 shows the current consensus ratings and recent (YTD) equity price performance for some of the largest international mining companies, ranked by market value.
Figure 1: VIX and Credit Spreads
| Name | Domicile | Consensus | Equity YTD |
| NEWMONT CORP | United States | a- | 12% |
| BARRICK GOLD CORP | Canada | a- | 23% |
| FRANCO NEVADA CORP | Canada | a- | 9% |
| NEWCREST MINING LTD | Australia | bbb+ | 7% |
| AGNICO EAGLE MINES LTD | Canada | bbb+ | 2% |
| KINROSS GOLD CORP | Canada | bbb+ | -7% |
| ANGLOGOLD ASHANTI LTD | South Africa | bb+ | 17% |
| GOLD FIELDS LTD | South Africa | bbb- | 34% |
| YAMANA GOLD INC | Canada | bbb | 26% |
| B2GOLD CORP | Canada | bb+ | 8% |
| IAMGOLD CORP | Canada | bb | 6% |
| ALAMOS GOLD INC | Canada | bbb | 2% |
| ENDEAVOUR MINING CORP | Cayman Islands | bb- | 28% |
| PRETIUM RESOURCES INC | Canada | bb | 5% |
| NEW GOLD INC | Canada | b+ | 18% |
Most of these firms are investment grade, but six are non-investment grade. Equity price performance in 2022 has been positive, with three companies increasing in value by more than 25%. In the current global environment of rising inflation, armed conflict and equity market volatility, precious metal mining is likely to see broad credit improvements.
Credit Benchmark cover more than 500 mining companies, many of them unrated by the main agencies. This data is now available on Bloomberg. Contact us for more info and a free coverage check.
