From Barron's Emerging Markets daily:
It depends on the miner.
Take Barrick Gold (ABX). Citigroup’s Brian Yu, says it will be able to maintain its covenants, but it will face other difficulties, especially with its Pascua Lama mine.
The falling price of gold, for instance, means Barrick will have to write down the value of the mine, which straddles the Chile/Argentine border and where work has been suspended. The hit could be as much as $5.5 billion. The good news, however, is that Barrick has a tangible book value of some $13.3 billion, Yu says, so Barrick shouldn’t trigger its loan covenants. It will, however, have to fully draw on their $4 billion facility and may even need cut its dividend, Yu says.
AngloGold Ashanti (AU), meanwhile, may not be so lucky. Not only was it downgraded to Underperform by BMO Capital Markets, Moody’s cut its credit rating to Baa3 from Baa2 on Friday. The credit-rating firm worries that a potential strike could make it difficult for the company to meet its loan covenants...MORE
