The recent dip in gold prices is putting the squeeze on regional producers, like New Gold in Rainy River and GoldCorp in Red Lake. Since April, the price of gold has dropped 150 dollars an ounce. For New Gold, this adds to financial pressue from debt load, as well as production costs. Share prices for the company sold for about 5-dollars a year ago, before dipping to a dollar 25 last week.
"As you are aware, our stock price has been under pressure since we revised our guidance for the year and gold prices have dropped to around $1,200 per ounce. As our Rainy River Mine continues to ramp up -- it's currently in the first year of a 14-year mine life -- and it shows consistent production results, we expect that the market will react more positively," said Julie Taylor, Director of Corporate Communications and Investor Relations.
At Goldcorp, the drop in the price of gold has combined with a drop in production. This has caused a dip in revenues resulting in a loss of 178-million last quarter.
Last week, Goldcorp issued a dividend of two cents a share. However, market analysts expected a dividend of seven cents a share.
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