TSX ends lower, June 25-29

The S&P/TSX Composite Index fell 1.05% to 16,277.73. The S&P/TSX Global Gold Index declined 0.63% to finish at 191.54, while spot gold fell 1.15% to US$1,252.40 per oz. gold.  The S&P/TSX Global Mining Index (USD) climbed 0.64% to 60.24.

Detour Gold was the second most traded stock of the week, rising 85¢ to $11.82. The company released an updated life-of-mine plan that it says will lower the annual variation in projected gold production in the previous plan. Under the updated plan, gold production is more consistent over the next 12 years, at 614,000 oz. a year, and increases to 725,000 oz. a year for the mine’s last 10 years. The 22.6-year mine life is based on amended reserves and assumes continued development of the Detour Lake pit, with the West Detour pit start-up in 2025 and the North pit in 2026. Compared to the prior plan, average mining costs over the life-of-mine will rise 9%; average milling unit costs, 8%; and average general and administrative expenses, 16%. The company noted in a press release that “if any bona fide, strategic alternatives become available to the company that compete with the value delivered by this stand-alone plan, the board would pursue the best course of action to maximize shareholder value.” The company has come under criticism from shareholder Paulson & Co. for its “failure to announce a strategic review, including a sale of the company,” the Globe and Mail newspaper reported on June 29.

Steppe Gold released a development update on its flagship Altan Tsagaan Ovoo gold-silver project in eastern Mongolia, sending its shares up 19% to $1.25. The junior is building an open-pit, heap-leach mine at an initial US$19.6-million capital expense, and expects first pour in the fourth quarter. Based on a technical report in October 2017, the mine will produce a total 146,699 oz. gold and 672,518 oz. silver. The company said construction costs are under budget. Steppe Gold forecasts initial annual production of 40,000 equivalent oz. gold at cash costs of under US$350 per oz. gold. Between now and November, Steppe Gold carries out construction and commissioning on the first-phase leach pad; a 5-tonne  absorption, desorption and refining  plant; crusher commissioning; site power; and haul roads. Three drill rigs will also undertake exploration and development drilling.

Shares of Silver Bear Resources climbed 12% to 24¢ in the wake of the first silver production from its Mangazeisky project in Russia’s Far East, 400 km north of Yakutsk. Commissioning began in April, and the company has mined 13,436 tonnes and milled 9,545 tonnes ore for 41,500 contained oz. silver in dry powder. Metallurgical test work confirms a mining grade average of 963 grams silver per tonne.


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