10:33 AM EDT, 07/10/2024 (MT Newswires) -- The operating results of precious metals producers in Q2 were "still weak" despite Q2's QoQ financial improvements, RBC Capital Markets said Wednesday.

Shifting to the second half RBC -- which says Q2 financial upside represents "a taste of 2H" -- expects 10% higher production versus the first half and a 3% improvement in AISC.

"These changes, plus the potential for continued higher gold prices are forecast to yield a stepwise improvement in our projected 2H financial performance," RBC said.

Given "reasonably low" net debt levels (i.e YE24 senior projected net debt/EBITDA at spot of 0.2x), RBC expects capital allocation to become an important discussion point, while noting that investor preferences have recently been biased to share buybacks due to the underperformance of gold equities' operating leverage compared to gold.

However, RBC said operators have leaned to focus on project opportunities and a prioritization of debt repayment ahead of meaningful return of capital.