US equities rise, June 15-19

U.S. stocks eked out gains, despite concerns about whether Greece would reach a deal with its lenders to avoid a default. The Dow Jones Industrial Average climbed 0.6% to 18,014.28, while the S&P 500 Index added 0.7% to 2,109.99. The Nasdaq rose 1.3% to close at 5,117. The spot price for gold jumped 1.6%, or US$19 to US$1,200.30 per oz., while the Philadelphia Gold & Silver Index stayed relatively flat at 66.65. 

Molycorp shares rose 18% to US43¢. The rare earth oxide producer dipped in earlier weeks after the Wall Street Journal reported that the company plans to file for Chapter 11 bankruptcy protection to reduce its US$1.7-billion debt. While Molycorp hasn’t confirmed this, it has skipped two interest payments, including a US$32.5-million semi-annual interest payment due June 1 on its 10% senior secured notes and a US$3.36-million semi-annual interest payment due June 15 on its 3.3% senior unsecured convertible notes. In both cases, this triggered a 30-day grace period. Molycorp intends to use this time to “evaluate different options related to such debt restructuring.”

Midway Gold shares plunged 54% to US4¢, as it struggled with its debt and operational issues at the Pan gold mine in Nevada. On June 19, the firm announced a workforce reduction at Pan, its sole producing asset. On June 22, it filed for Chapter 11 bankruptcy protection.

Uranium Energy dropped 38% to US$1.80 per share after a negative blog post claimed Uranium Energy would collapse, as it hasn’t produced for the “past seven quarters” from its sole Palangana uranium mine in Texas, which caused two New York-based law firms to launch separate investigations into the company. The company responded that the investigations have “absolutely no merit.”

Newmont Mining added US$1.10 to finish at US$24.65 per share, after issuing 29 million shares to Citigroup and J.P. Morgan for net proceeds of US$674 million. The company intends to use the funds, supplemented with cash in its treasury, to acquire the Cripple Creek & Victor gold mine in Colorado for US$820 million from AngloGold Ashanti.


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