US stocks drop, July 7-11

The S&P 500 Index dropped 18 points to 1,967.57, marking its worst week since April, as European economic uncertainty continued. The Dow Jones Industrial Average fell 124 points to 16,943.81, while the Nasdaq Composite Index gave back 70 points to end at 4,415.49. However, the spot gold price climbed US$18.50 to US$1,339 per oz.

Decent preliminary second-quarter costs pushed Lake Shore Gold up 29% to US$1.19. The firm reported quarterly and six-month cash-operating costs of US$570 and US$600 per oz. sold — a 37% and 36% improvement from the same periods last year. Lake Shore expects all-in sustaining costs per ounce of US$810 for the quarter and US$890 for the half year, both below its full-year guidance. 

Banro tumbled 29% to US34¢ after updating investors on its Twangiza and Namoya gold mines in the Democratic Republic of the Congo. While Twangiza experienced heavy rainfall in April, it delivered 21,431 oz. gold in the second quarter — an 11% improvement over the same quarter of 2013.

At Namoya, Banro noted the plant cannot run at design capacity because of problems processing large amounts of fine material. As a result, Banro intends to downsize the Namoya operation until it upgrades its processing facilities, which could be complete within the next year or so.

Banro has halved Namoya’s 2014 production guidance to 25,000 to 30,000 oz. and lowered Twangiza’s output to 90,000 to 100,000 oz., from 100,000 oz. due to a “wet start to the year.”

Aluminum giant Alcoa saw heavy trading during the week after releasing positive second-quarter results. Alcoa, which is the first S&P 500 company to report its quarterly earnings, posted an adjusted profit of US$216 million, or US$18¢, 50% more than analysts had expected. Alcoa advanced US99¢ to US$15.97, on 141 million shares traded.

Randgold Resources jumped US$3.03 to US$89.34, on no major news. In early July, the firm’s CEO Mark Bristow and his “Boyz on Bikes” team completed a fundraising ride, covering 12 African countries and 10,000 km in 26 days. The team raised $1.6 million from sponsors and supporters, beating its $1-million target.

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