Wall Street dips, Jan. 9–13

U.S. equities slipped into negative territory, as oil prices retreated and gold rose. The S&P 500 Index dipped 0.1% to 2,274.64, while the Dow Jones Industrial Average fell 0.4% to 19,885.73. The Nasdaq, however, rose nearly 1% to 5,574.12. Spot gold gained 2% to finish at US$1,196.90 per oz., while U.S. crude oil futures retreated 3% to US$52.37 per barrel.

Uranium major Cameco jumped 23.4% to US$13.29 per share, on the back of production cuts from Kazatomprom, Kazakhstan’s state-owned firm and global uranium production leader. Kazatomprom said it would cut 2017 uranium output by 10%, or 5.2 million lb., after the commodity price weakened in 2016 due to a global oversupply.

“This news is a definite surprise and may be the inflection point for the uranium space to head higher across the board,” Rob Chang, a Cantor Fitzgerald analyst, said in a note. Spot uranium closed Jan. 9 at US$22 per lb., up 22%, or US$4, from the low reached last November, according to UX Consulting. Around that time, Cameco shares hit a US$7.41 low. Cameco also suspended its Rabbit Lake uranium mine in Saskatchewan and lowered U.S. output last year to its lower costs.

Goldcorp shares finished flat at US$14.60, despite the company reporting two non-core asset sales. On Jan. 11, Goldcorp agreed to sell its Cerro Blanco gold-silver project in Guatemala to Bluestone Resources for US$18 million in cash, a 1% net smelter return royalty on production and 9.9% of Bluestone’s issued and outstanding shares once the transaction closes. Goldcorp will also receive US$15 million in cash when commercial production starts at Cerro Blanco. A day later, Goldcorp said it would sell its Los Filos mine in Mexico to Leagold Mining for US$438 million. That includes US$279 million in cash, US$71 million in Leagold shares and US$88 million in certain tax receivables. Both transactions should close by the end of March.

Tahoe Resources shares dropped 6.4% to US$9.02, despite the company reporting it could potentially increase resources at its operations after positive 2016 drill results. It is targeting to spend $35 million to $45 million this year on expensed exploration. Last year, Tahoe invested $28 million on both expensed exploration and capitalized drilling.


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