US Markets mixed, Nov. 12-16

Gold rose 0.9% to close the trading week at US$1,221.10.  The Philadelphia Gold and Silver Index rose 2.9% to 66.08, while the Dow Jones Industrial Average fell 2.2% to 25,413.22. The S&P 500 Index fell 1.6% to 2,736.27.

Shares of Sibanye-Stillwater rose 12.2% to US$2.67, after the company signed a three-year wage agreement with three unions. The company failed, however, to reach an agreement with the Association of Mineworkers and Construction Union. The company claims that national leadership in the union intervened during negotiations and “persisted with its original, unaffordable demands.” The union represents 43% of the more than 32,000 people employed at the company’s South African operations.

Shares of Gold Fields rose 5.7% to US$2.96, despite labour issues at the company’s South Deep underground gold mine in South Africa. Around 150 people at South Deep went on strike with the National Union of Mineworkers on Nov. 2, 2018, or 3% of the workforce.

The striking workers have been trying to prevent service teams from entering the mine, and some of their efforts have turned violent. Soon after the strike began, members of the union set fire to offices at the mine’s adult education and training centre, and attacked the cars of three employees trying to go to work, as well as a protection-services vehicle. The union is protesting the company’s plans to fire 1,500 of South Deep’s 3,500 employees.

The company says cutting jobs could help stabilize the mine, which it says is losing more than $9 million a month. The company has lost more than $15 million in South Deep revenue since the strike began.

Shares of Cloud Peak Energy fell 14.9% to US$1.26 after the company announced it would “review strategic alternatives,” including selling the company. The company’s stock has fallen from a peak of US$5.70 in January 2018. The company has struggled since 2015, when its share price fell below US$10 after Rio Tinto Energy America spun it out in 2009.

The company lost US$24.9 million in the first three quarters of 2018, compared to a US$24.5-million net loss for the first three quarters of 2017. Ending its post-retirement medical plan brought a non-cash gain of US$19.5 million, which raised its 2018 third-quarter net income to US$12.7 million.


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