The second quarter earnings season has officially kicked off for the mining sector and one Canadian bank is warning investors that things could get a little messy as the global economy deals with the impact of the COVID-19 pandemic.

Market analysts at CIBC said in a report Wednesday that there is now a tug of war between lower production due to COVID-19 issues and higher commodity prices. They added that in the coming days less attention should be paid to companies’ performance versus forecast expectations.

“We believe attention will be more focused on the production and cost outlook for H2/20 as most mines are now back up and running. Additionally, [free cash flow (FCF)] outlook in the near/long term and the companies’ capital allocation priorities in this rising gold price environment are areas of focus for the market and ourselves,” the analyst said.

Although gold production is expected to be impacted in the latest earnings reports, CIBC noted that gold producers are also enjoying significantly higher gold prices.

“The Q2/20 gold price average of $1,714/oz represents an 8.4% quarter-over-quarter increase compared to Q1/20 at $1,581/oz,” the analysts said. “We remain bullish on our gold outlook with spot prices currently trading at our Q4 and 2021 forecast of $1,800/oz, a level not reached since 2011.”

Looking past 2020, CIBC said that their top picks in the mining sector for 2021 are: Agnico Eagle (NYSE: AEM, TSX: AEM), Alamos Gold (NYSE: AGI, TSX: AGI), B2Gold (NYSE: BTO, TSX: BTG), Barrick Gold (NYSE: GOLD), Eldorado Gold (NYSE: EGO, TSX: ELD), Endeavour Mining (TSX: EDV), Franco-Nevada (NYSE: FNV), Kirkland Lake Gold (NYSE: KL, TSX: KL), Pan American Silver (NASDAQ: PAAS, TSX: PAAS), Teranga Gold, (TSX: TGZ) and Wheaton Precious Metals (NYSE: WPM, TSX: WPM).

CIBC’s outlook for the mining sector comes as Freeport-McMoRan reported solid earnings in the second quarter. One of the world’s largest copper mining companies reported adjusted net income attributable to common stock totaling $44 million, or $0.03 per share. The earnings hit the top end of analysts’ forecasts.

Earnings up are from a reported adjusted net loss attributable to common stock totaled $58 million, $0.04 per share in the second quarter of 2019.