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<p><strong>Gold 2Q 2014: Review of Earnings Results and Costs</strong></p><br/>

<p><strong>Gold Miner Earnings, Expectations, and Revision</strong></p><br/>

<p>JOE FOSTER: Ima, we're nearly through the fourth quarter earnings season for gold companies. Have these gold companies met our expectations? </p><br/>

<p>IMA CASANOVA: Most of the companies we track have now reported their fourth quarter results.  As for their earnings results, a little less than half of the companies have missed expectations while the other half have either met or exceeded expectations.  On the positive side, a lot of the misses have been driven by non-operating items such as general and administrative expenses, sales that were lower than production, interest, tax, etc.  Operating results were actually broadly in line with expectations.  As a result, the market focused more on cost performance and operating results, and did not necessarily punish companies that missed earnings expectations.</p><br/>

<p>FOSTER: So the market has been able to look past some of the extraordinary items to see through to the bottom line of what's really been happening with these companies? </p><br/>

<p>CASANOVA: Exactly. Along with financial results, gold companies also put out reserve revisions and change of mine plans, and some had to reduce their dividends – all the things that mining companies do at the end of the year. The market reaction was not what you would expect for these types of write-downs and impairments.  Instead the market has taken this as a reaction to a lower gold price environment and these companies are doing what they need to do to survive in this environment. At the same time, these companies are doing what investors want: be more disciplined with costs and increase rates of return.  Gold equities as a sector has done really well so far this year.</p><br/>

<p><strong>Controlling Costs</strong></p><br/>

<p>FOSTER: The gold industry has been through a horrendous period of rising costs over the last number of years, and we saw that moderate somewhat in 2013.  Do you see any trend developing?  What are we looking for as we move into 2014?</p><br/>

<p>CASANOVA: In 2013 we saw a declining trend for costs. We monitor cost throughout the quarters, and third quarter costs were better than the second; the fourth quarter results that we just reviewed were slightly better than Q3 costs.  For 2014, the companies have provided guidance. In general, they're not necessarily expecting a decline in costs for the year but are expecting it to be relatively flat. However, we wouldn't be surprised to see costs continue to come down, considering that many of the cost cutting initiatives that the company implemented last year are still being implemented and deployed this year. In addition, we're seeing weaker foreign currencies, which could translate into lower U.S. dollar costs for many of the operations in the sector. </p><br/>

<p>FOSTER: It certainly seems that the market is looking through a lot of the messiness that we saw with the quarterly reporting, and I think the share price performance indicates that the market is taking a much more positive view on these gold stocks this year.</p><br/>

<p>CASANOVA: Yes.  Let's hope it continues that way.</p><br/>

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<p><strong>IMPORTANT DISCLOSURE</strong></p><br/>

<p>The views and opinions expressed are those of the speaker and are current as of the video’s posting date. Video commentaries are general in nature and should not be construed as investment advice. Opinions are subject to change with market conditions. All performance information is historical and is not a guarantee of future results. For more information about Van Eck Funds, Market Vectors ETFs or fund performance, visit <a title="" href=""></a>. Any discussion of specific securities mentioned in the video commentaries is neither an offer to sell nor a solicitation to buy these securities. Fund holdings will vary. All indices mentioned are measures of common market sectors and performance. It is not possible to invest directly in an index. Information on holdings, performance and indices can be found at <a title="" href=""></a>   </p><br/>

<p><strong>Please note that Van Eck Securities Corporation offers investment products that invest in the asset class(es) included in this video.</strong> Gold investments can be significantly affected by international economic, monetary and political developments. Gold equities may decline in value due to developments specific to the gold industry, and are subject to interest rate risk and market risk. Investments in foreign securities involve risks related to adverse political and economic developments unique to a country or a region, currency fluctuations or controls, and the possibility of arbitrary action by foreign governments, including the takeover of property without adequate compensation or imposition of prohibitive taxation.</p><br/>

<p>No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission of Van Eck Securities Corporation. © 2014 Van Eck Global.</p><br/>

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