TSX drops, Jan 4-8

Canada’s benchmark index posted a triple-digit loss in the new year. The S&P/TSX Composite Index fell 4.3%, or 564.5 points to 12,445.45, despite a positive jobs report. The S&P/TSX Capped Diversified Metals & Mining Index tumbled 14.4% to 299.66, and the S&P/TSX Global Mining Index dropped 5% to 42.13. The S&P/TSX Global Gold Index climbed 9.4% to 141.73, helped by higher gold prices. The New York spot price added 4.1%, or US$43.60 per oz., to finish at US$1,104.60.

Employers in Canada added 22,800 jobs in December, compared to the 10,000 positions analysts polled by Reuters had expected. The unemployment rate stayed at 7.1%, up from 6.7% at year-end 2014. The total number of jobs created in 2015 was 158,000, or 0.9%, slightly above the 0.7% annual growth rate in both 2013 and 2014.

Gold companies dominated the value gainers’ list, with Franco-Nevada climbing $5.75 to $69.05 per share, and Agnico Eagle Mines advancing $5.45 to $41.82 per share, both on no corporate news.

Golden Queen Mining — the week’s percentage winner— soared 70% to $1.19 per share, after reporting it’s on track to pour first gold in early February from its partly owned Soledad Mountain gold-silver project in California. The project is 95% built and it’s on budget, with the Merrill-Crowe facility commissioning underway. During full production (year two to 11), the heap-leach operation should churn out 74,000 oz. gold and 781,000 oz. silver annually. Start-up costs are $144 million, with total cash costs of US$518 per oz., net of silver by-product. Soledad has an estimated 11.3-year mine life.

Anaconda Mining shares climbed 50% to 6¢, after improved financials for the quarter and half-year ended Nov. 30, 2015, from its Point Rousse gold project in Newfoundland. Quarterly earnings were $741,293, up from a loss in 2014, on revenues of $6.8 million from sales of 4,605 oz. gold at an average $1,476 per oz. For half a year earnings were $567,075 — up from a $1-million loss — on revenues of $12.6 million, from sales of 8,561 oz. gold at an average $1,470 per oz. All-in sustaining cash costs for the three and six months ended in November was $1,364 and $1,424 per oz.

Fortune Minerals rose 50% to 3¢ per share, after producing a premium high-quality cobalt sulphate heptahydrate sample from a cobalt sulphate product previously produced in a pilot plant, using concentrates from its NICO gold-cobalt-bismuth-copper deposit in the Northwest Territories. Fortune is advancing off-take discussions with potential customers to support project financing.

Lake Shore Gold saw heavy trading after production results for the fourth quarter and full-year in 2015. Its annual sales were 183,300 oz., same as in 2014, at a lower average price of US$1,164 per oz. It ended 2015 with $100 million in cash and bullion. Lake Shore added 10¢ to close at $1.22 per share, with 24.4 million shares traded.


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