RBC: “Significant Pain At $1,300 Gold”

In a study published yesterday, RBC Dominion Securities Inc. predicted “significant pain” if Gold were to trade at an average price of $1,300…“We would expect all the Gold producers in our coverage universe to cut all discretionary expenses, cut capital spending sharply, defer new capital development programs and in some cases cut dividends”, the bank said in the report looking at producers to assess exposure to falling prices at price levels ranging from $1,500 an ounce to $1,200 an ounce…at $1,200 per ounce, the bank said, companies such as Barrick (ABX, TSX), Kinross (K, TSX) and Newmont Gold Co. (NMC, TSX) could be downgraded to non-investment-grade levels…in the falling Gold price environment, the bank said, companies with big projects on the go may require additional debt to complete plans…Goldcorp Inc. (G, TSX), New Gold Inc. (NGD, TSX), Yamana Gold Inc. (YRI, TSX) and Agnico-Eagle (AEM, TSX) are among the miners best able to withstand lower prices because they have lower costs, lower levels of debt and have recently completed new mine development…miners with a higher proportion of Gold production from underground mines are also in better shape because they can change plans to access higher-grade, lower-cost ore, the bank report stated…