TSX posts modest gains, March 5-9

Canada’s benchmark index rose 1.25% to 5,577.81 during a largely stagnant trading week. The S&P/TSX Global Mining Index fell 0.35% to 70.33 and the S&P/TSX Global Gold Index fell 0.75% to 180.05. West Texas Intermediate crude rose 1.3% to US$62.04, while the gold price rose just 0.04% to US$1,323.10.

Shares of Agnico Eagle rose 89¢ to $50.04. The company announced in February that it had been approached several times about selling its cobalt assets. Agnico holds land near Cobalt, Ont., which hasn’t produced minerals since 1988. The company says it will evaluate its portfolio and would be open to a deal wherein it keeps a royalty.

The company saw higher production and cash costs per ounce for the fourth quarter of 2017 versus the same quarter of 2016, but a higher full-year net income, as well. For 2017, Agnico recorded a net income of US$243.9 million compared to US$158.8 million for 2016. It attributed the increase to higher metal prices and sales volumes.

Shares of RTG Mining fell 22.9% to 14¢, as the company faces uncertainty over anti-mining sentiment in the Philippines, where it has its development-stage Mabilo polymetallic project and several other exploration properties. Mabilo has 7.19 million probable tonnes grading 45.5% iron, 1.95% copper, 2.04 grams gold per tonne and 8.79 grams silver.

RTG had envisioned Mabilo as an open-pit project, however, in early 2017, then-environmental secretary Regina Lopez banned open-pit mining. A few months later, a 25-member House-Senate committee voting on whether to retain cabinet appointees ousted her.

As a result of the ban, Indonesia surpassed the Philippines as the world’s largest nickel producer. A new report by BMI Research predicts Indonesia will continue as the world leader while nickel-mining production in the Philippines “is expected to remain subdued in 2018, as policy uncertainty continues to plague the sector.”

Philippine President Rodrigo Duterte appointed Roy Cimatu, the former Armed Forces chief of staff, in Lopez’s stead. As a result, BMI predicts a softening of the current ban. It’s unclear how future ruling will affect RTG’s ability to take Mabilo into production.

Shares of Teck Resources fell $2.57 to $33.83. Teck recently lowered its projected coal sales slightly from 6.5 million tonnes to 6 million tonnes. The company blamed the discrepancy on “logistics issues” at Westshore Terminals, a coal export terminal in the Vancouver area.

The company also restarted its Elkview coal-mine drying complex. The company expects to lose 200,000 tonnes in coal output because of the two-month interruption, but says full commercial production will resume shortly. Teck says repairs to the dryer will cost less than $10 million.


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