TSX ekes out slim gain, May 9-13

The ferocious wildfires in Alberta’s oil patch around Fort McMurray knocked an estimated 1 million barrels a day offline, prompting many economists to lower their 2016 gross domestic product growth targets for the entire country. A Bloomberg survey of 10 economists concluded that the blaze would trim growth this year by one-tenth of a percent. The Toronto stock market rose 0.3% to 13,748.58. Most indexes ended lower, however, with the S&P/TSX Capped Diversified Metals & Mining Index falling 6.9% to 493.31 and the S&P/TSX Global Mining Index losing 4% to 56.03. Spot gold fell US$14.90 per oz., or 1.2% to US$1,272.80, sending the S&P/TSX Global Gold Index down 1.8% to 224.43.

Record results from Richmont Mines’ Island gold mine led to strong first-quarter numbers and lifted the company’s shares 90¢ to $10.96. The Island mine produced 26,589 oz. gold during the three months ended March 31, a 147% increase over the same period in 2015. Increased production was due to higher-than-expected grades of 11.31 grams gold per tonne and record mill throughput of 834 tonnes per day. The company reported cash costs of US$587 per oz. and all-in sustaining costs of US$801 per oz., for an 18% and 12% decrease. Earnings reached $8.5 million, or 15¢ per share, which is an increase of 85% and 67% year-on-year. Richmont also posted net free cash flow of $1.1 million, or 2¢ per share, compared to neutral net free cash flow the year before. Richmont held $61.2 million in cash as of March 31, and said that with its anticipated cash flow from operations, its treasury should fully fund its accelerated development program at the gold mine this year.

Shares of Pan American Silver jumped 74¢ to $20.25 on the back of first-quarter results. Silver production rose 6% to 6.42 million oz. during the three months ended March 31, while production increased 10% to 41,200 oz. gold. Pan American Silver lowered consolidated cash costs 31% to US$8.03 per payable oz. silver, net of by-product credits, and trimmed consolidated all-in sustaining costs per silver ounce sold by 8% to US$13.12, net of by-product credits. Adjusted earnings came in at US$3.5 million, compared to a US$19.9-million adjusted loss in the first quarter of 2015.

Pan American held US$177.6 million in cash and short-term investments, and US$383.7 million in working capital at the end of March.

Initial results from early 2016 drilling at Balmoral Resources’ Detour trend project on its Martiniere property in Quebec lifted the junior’s shares 35.4% to 88¢. Balmoral reported intercepts of 14.08 grams gold per tonne over 12.6 metres, including 199 grams gold over 0.9 metre; 11.55 grams gold over 4.5 metres; and 3.31 grams gold over 15.4 metres, including a higher-grade core of 6.08 grams over 5.3 metres. The three holes tested the southern part of the Bug Lake gold trend. Results from eight more holes are pending.


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