TSX posts strong gains, Feb. 6-10

Higher commodity prices, a positive jobs report and a second monthly trade surplus in December combined to power Canada’s main stock index to 15,729.12, up 1.6%, and surpassing the S&P/TSX Composite Index’s last peak in 2014. The New York spot price for gold climbed to US$1,232.90 per oz. in a 1.1% gain, sending the S&P/TSX Global Gold Index surging 4.3% to 228.23. The S&P/TSX Global Mining Index rose 3.5% to 72.52 and West Texas Intermediate crude closed at US$54 per barrel.

B2Gold’s shares were the most traded and rose 40¢ to $4.45 apiece on strong 2016 operating results. The company reported record consolidated gold production of 550,423 oz. gold, up 12% year-on-year, and yielding annual gold revenue of US$683.3 million on sales of 548,281 oz. at US$1,246 per ounce. The miner forecast that full-year consolidated cash-operating costs for 2016 would come in between US$500 and US$535 per oz., and all-in sustaining costs should be between US$780 and US$810 per ounce. This year, B2Gold expects consolidated gold production of between 545,000 and 595,000 oz., with cash-operating costs of between US$610 and US$650 per oz., and AISC of between US$940 and US$970 per ounce. In 2018, the company expects gold production will jump to between 900,000 and 950,000 oz., due to the first full year of production at its Fekola project in Mali.

Teck Resources jumped $1.04 to $32.60 per share. The company updated investors on its Fort Hills oilsands project, 90 km north of Fort McMurray in northeastern Alberta. Teck holds a 20% stake in the Fort Hills Energy Ltd. Partnership, the owner of Fort Hills, while E&P Canada owns 29.2% and Suncor Energy owns 50.8%. At the end of 2016, construction was over 76% complete and the project is on track to produce first oil later this year. But the Fort McMurray wildfires last year have driven up capital cost estimates for the secondary extraction facility 10% over the project estimate, excluding foreign-exchange impacts. Teck’s share of project capital costs through to completion (including foreign exchange) — as of Dec. 31, 2016 — is an expected $805 million, with $640 million spent this year. Due to the increase, Teck said it would record an after-tax impairment charge of $164 million in its fourth-quarter results. The company expects average production rates of 186,000 barrels a day throughout the project’s life.

Shares of Verde Potash soared 156% to 78¢ after the company announced that Brazil’s Department of Mineral Production had granted an environmental licence for its Cerrado Verde project. The next step is to secure a mining permit. The company expects to produce 19,500 tonnes of its Super Greensand product and 500 tonnes of its Alpha product in the first half of 2017. Super Greensand increases the soil’s capacity to retain water and nutrients, while Alpha is said to boost crop protection against pests and disease.

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