U.S. markets mixed, Feb. 15-19

Operations at the Canadian Malartic gold mine 25 km west of the Val-d’Or, Quebec. Credit: Osisko Gold Royalties.

The Dow Jones Industrial Average rose 35.92 points (0.11%) to 31,494.32 during the Feb. 15-19 trading week and the S&P500 fell 28.12 points (0.72%) to 3,906.71. Spot gold finished the trading week at US$1,784.60 per oz., down 2.2%.

HudBay Minerals rose 19.9% to US$8.09 per share. The company reported a net loss of US$144.6 million or US55¢per share in 2020, compared to a net loss of US$343.8 million (US$1.32 per share) in 2019. (The2019 loss was mainly caused by an after-tax impairment chart of US$242.1 million recorded in HudBay’s investment in the Rosemont project.) Gross margins declined in 2020 partly due to operational suspensions at the Constancia and 777 mines, which caused some fixed overhead production costs to be immediately expensed as part of cost of sales with no corresponding revenue. The company reported 2020 production of contained metal in concentrate of 95,333 tonnes of copper; 124,622 oz. gold; 2.75 million oz. silver; 118,130 tonnes of zinc; 1,204 tonnes of molybdenum. In 2021 HudBay expects to produce 83,000-97,000 tonnes of copper; 105,000-125,000 tonnes of zinc; and 1,100-1,300 tonnes of molybdenum.

Shares of Barrick Gold fell US$2.37 to US19.78. The company reported 2020 production of 4.76 million oz. of gold at all-in sustaining costs of US$967 per oz., and 457 million lb. of copper at AISCs of US$2.23 per lb. Net earnings for the year were US$2.32 billion and adjusted net earnings were US$2.04 billion. Net earnings per share were US$1.31 and adjusted net earnings were US$1.15 per share. The company posted record annual free cash flow of US$3.4 billion. Barrick ended 2020 with zero debt, net of cash, down from a peak of US$13.4 billion in 2013. Production guidance for 2021 is 4.4 million to 4.7 million oz. of gold. Barrick also said it will propose to shareholders at its May 4 annual meeting, a return of capital distribution of about 42¢ per share. The distribution would be from a portion of the proceeds from the divestiture of Kalgoorlie Consolidated Gold Mines in 2019, and from other recent dispositions. The total distribution would amount to US$750 million. In other news, Barrick is selling its 100% stake in the Lagunas Norte mine in Peru to Singapore’s Boroo Pte. Ltd. for a total consideration of up to US$81 million, plus Baroo’s assumption of Barrick’s US$226 mine closure liability, backed by a US$173 million bonding obligation.

Shares of Agnico Eagle Mines were down US$6.89 to US$59.79 and Yamana Gold’s fell US41¢ to US$4.40. The companies, joint-venture partners at the Canadian Malartic mine in Quebec, announced a positive construction decision for the mine’s Odyssey underground project. From 2029 to 2039, the underground operation will be in full production, churning out between 500,000 and 600,000 oz. gold a year. The project hosts three main underground zones: East Gouldie, East Malartic, and Odyssey.


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