U.S. equities were hammered following comments mid-week from U.S. Federal Reserve Chairman Ben Bernanke that the central bank would scale back its quantitative easing program later this year. At a press conference Bernanke said he expects asset purchases would be trimmed in the second half of this year and likely come to an end in mid-2014.
The New York spot price of gold plunged nearly US$73.50 on June 20 to US$1,277.80 per oz. For the week the Dow Jones Industrial Average fell 270.78 points, or 1.8%, to 14,799.40. The S&P 500 Index dropped 34.3 points, or 2.1%, to 1,592.43; and the Nasdaq Composite Index lost 66.31 points, or 1.9%, to 3,357.25. The Philadelphia Gold and Silver Index fell 11.15 points, or 12.2%, to end the week at 102.56.
Goldcorp shares dropped US$3.10 to US$24.59, while those of Barrick Gold and Kinross Gold shed US$2.61 to US$16.89 and US79¢ to US$5.03. On June 20 Goldcorp announced that it had filed a claim in the First District Court of Zacatecas, Mexico, that resulted in a temporary suspension of an agrarian court ruling. This purports to nullify the company’s lease of about 6 sq. km of surface land within its Penasquito mine site and orders the land be returned to the Cerro Gordo ejido. Goldcorp says a hearing for a permanent suspension of the court ruling will be held on June 27. Penasquito is the largest gold producer in Mexico.
Cabot Corp.’s announcement that it would acquire the remaining 60% of its carbon black manufacturing joint venture in Mexico for US$105 million pushed its shares up US41¢ to US$37.80. The Nhumo joint venture is the leading producer of carbon black in Mexico and churns out about 140,000 tonnes per year. Cabot estimates that operational synergies alone from the transaction could contribute US5¢ to US10¢ earnings per share within the next two to three years. Cabot has owned 40% of the joint venture since 1990 and is the leading producer and marketer of carbon black in the world. In fiscal 2012 the Mexican joint venture generated adjusted earnings before interest, taxes, depreciation and amortization of US$41 million.
U.S. most active issues
|Alpha Nat Res*||ANR||63429||6.09||5.36||5.49||–||0.51|
|Cliffs Nat Rs*||CLF||59943||19||16.88||17.19||–||0.55|
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|Lake Shore Gd*||LSG||2234||0.3||0.17||0.18||–||41.6|
|Intl Tower Hi*||THM||4545||0.81||0.51||0.51||–||36.2|
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|Soc Quim&M Ch*||SQM||4996414||39.95||–||3.87|