Johannesburg, South Africa — MININGREVIEW.COM — 04 September 2009 – JP Morgan “’ a leader in financial services, offering innovative solutions to clients in more than 100 countries “’ has maintained an "overweight" rating on shares in AngloGold Ashanti Ltd, the world’s third largest gold miner, on the back of a strong balance sheet.
Revealing this in a research note here, JP Morgan also retained its "overweight" rating for Gold Fields Limited “’ the fourth biggest producer “’ again because of a strong balance sheet “’ but downgraded Harmony Gold Mining Company Limited “’ the fifth largest world producer “’ to "underweight" from "neutral," due to pressure on its cash flow.
In the research note, JP Morgan maintained an "underweight" rating for South Africa-focused DRDGOLD, after the company had improved its cash flow and surface operations at its Blyvoor mine.
The company said gold production in South Africa “’ the world’s third biggest producing nation “’ would decline in the current quarter due to safety stoppages, high wage costs and a jump in power prices. South Africa’s power utility Eskom increased power tariffs by 31% in June, raising fears that the hike could spur higher production costs in the mining sector.
“Loss of production due to safety stoppages and high wage and electricity cost inflation are the immediate concerns for South Africa gold mining management,” JP Morgan said in the note.
The company revised its gold price forecasts for 2009 downwards to US$939 per ounce from US$958 per ounce on low demand.