Agnico-Eagle Mines Limited (USA) (AEM), Goldcorp Inc. (USA) (GG): Are Gold Stocks Still Attractive?

Should you buy this stock?

While Goldcorp Inc. (USA) (NYSE:GG)’s first-quarter results missed earnings expectations on lower gold and by-product metal sales volumes, the developments in Q1 and the outlook for 2013 open up a bullish window on the stock.

In terms of development, the announcement of a new water source at Penasquito that has the potential to support ramp-up to name-plate capacity is seen as a significant positive given that previous guidance at Penasquito inferred that name-plate capacity would be more of a blue sky situation.

From an operational outlook perspective, production and cost metrics are expected to improve throughout the year as gold and byproduct grades improve sequentially at Penasquito and Pueblo Viejo continues to ramp to full capacity. Overall, with improving operations and further clarity on the water solution at Penasquito upcoming, Goldcorp Inc. (USA) (NYSE:GG) is recommended as a buy when moving forward in 2013.

Final word

Overall, the gold producers largely maintained 2013 operating guidance, with the exception of Agnico-Eagle Mines Limited (USA) (NYSE:AEM), as the company increased cash cost guidance. However, with most of the gold companies starting off the year stronger than expected, there seems to be potential for operating guidance revisions or beats later in the year.

The article Are Gold Stocks Still Attractive? originally appeared on Fool.com is written by Zain Abbas.

Zain Abbas has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Zain is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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