TSX posts gains, Jan. 25-29

An interest rate cut by Japan’s central bank, the U.S. Federal Reserve’s decision to leave rates alone and rising oil prices — West Texas Intermediate crude finished at US$33.70 per barrel — lifted global markets. There was also positive news on the home front, with Statistics Canada reporting that real gross domestic product rose 0.3% month-on-month in November, after no growth in October and a 0.5% drop in September. The S&P/TSX Composite Index advanced 3.5% to close at 12,822.13. Several other indexes also ended in positive territory. The S&P/TSX Global Mining Index rose 6.96% to 41.36; the S&P/TSX Capped Diversified Metals & Mining Index jumped 8.3% to 277.60; and the S&P/TSX Global Gold Index surged 10.5% to 140.63. Spot gold climbed US$19.80 per oz., or 1.8%, to finish at US$1,117.80.

Potash Corp. of Saskatchewan said it would cut its quarterly dividend 34% to 25¢ per share. The company also reported fourth-quarter earnings of 24¢ per share ($201 million) and $1.52 per share ($1.3 billion) for all of 2015. “Weaker fertilizer prices late in the year reduced our earnings for the quarter, giving rise to a more cautious outlook for all three nutrients [potash, nitrogen and phosphate] as we begin 2016,” Jochen Tilk, PotashCorp’s president and CEO, said in a news release. The company expects 2016 earnings will come in at 90¢ to $1.20 per share (10¢ to 20¢ per share for the first quarter). The company’s shares gained 6¢ to $22.84.

Silver Wheaton’s shares climbed $1.52 to $16.51. The company signed a non-binding term sheet with Panoro Minerals for an early deposit precious metals purchase agreement for the junior’s Cotabambas project in Peru. Under the proposed agreement, Silver Wheaton can buy 100% of the silver production and 25% of the gold production from Cotabambas until 90 million equivalent oz. silver attributable to Silver Wheaton have been produced, at which point the stream would drop to 66.7% of silver production and 16.7% of gold production for the life-of-mine (LOM). Silver Wheaton will pay a total cash consideration of US$140 million, plus an ongoing production payment.  

A revised life-of-mine plan for the Detour Lake gold mine in northeastern Ontario lifted Detour Gold’s shares by $1.92 to $17.04. The plan incorporates a second feed source from the West Detour deposit, reduces the front end waste-to-ore strip ratio in the first nine years from 4.8:1 to 4.0:1 (eliminating 160 million tonnes of waste) and lowers the maximum mining rate from 140 million tonnes to 124 million tonnes, among other things. Processing low-grade stockpiles (LG fines) in 2019 will add a third ore source and contribute to a plant throughput capacity of 23 million tonnes after 2018.