US markets move higher, Nov. 14-18

Expectations that U.S. president-elect Donald Trump would stimulate the economy through infrastructure spending lifted Wall Street. The Dow Jones Industrial Average rose 0.1%, or 20.27 points, to 18,867.93, and the S&P 500 Index advanced 0.8%, or 17.45 points, to 2,181.90. The U.S. dollar rose against a basket of currencies to its highest level since April 2003. After Fed Chair Janet Yellen told a congressional panel that a rate increase was likely “relatively soon,” the gold price dropped 1.7%, or US$20.20, to US$1,207.40 per ounce. The Philadelphia Gold & Silver Index rose 1.6% to 79.31. West Texas Intermediate crude ended 5% higher at US$46 per barrel.

Newmont Mining’s shares were up US$1.10 to US$32.69 on news of commercial production at its Long Canyon oxide mine in Nevada. The company describes Long Canyon as “the most significant ore discovery in Nevada in more than a decade.” Newmont completed the project two months ahead of schedule for just under US$225 million, or US$50 million (18%) below budget. The first development phase could produce between 100,000 and 150,000 oz. gold a year over an eight-year mine life, at costs applicable to sales of between US$400 and US$500 per oz., and all-in sustaining costs of between US$500 and US$600 per ounce. Phase-two studies are underway and Newmont expects to complete these and secure permits to proceed before depleting phase one. Newmont has grown the resource at Long Canyon 30% in two years, from a resource of 2.6 million oz. in 2013 to reserves and resources of 3.4 million oz. by the end of 2015. Newmont geologists have also increased the mineralized strike 70% to more than 5 km, with oxide mineralization open in all directions. Long Canyon is the fourth profitable operation Newmont has added to its portfolio in the last three years.

Shares of Gold Fields fell 4.4% to US$3.24. The company withdrew its joint acquisition offer with Silver Standard Resources for Kirkland Lake Gold. The South Africa-based gold miner said they had made three successive non-binding proposals for Kirkland Lake Gold, but were rebuffed each time. The most recent cash-and-share offer was valued at US$1.1 billion. Kirkland Lake said the offers were not superior to its previously announced combination with Newmarket Gold.