TSX dips, gold rises, May 15-19

Fallout from U.S. President Donald Trump’s recent firing of FBI chief James Comey and uncertainty about the Russia government’s role in the 2016 U.S. presidential election continued to rattle global markets. The political volatility drove up the gold price as a safe haven asset, however. The S&P/TSX Composite Index fell 0.51% to 15,458.46, while gold finished 2.27% higher at US$1,255.60 per ounce. The S&P/TSX Global Mining Index rose 1.16% to 66.54 and the S&P/TSX Global Gold Index lost 0.88% to end at 212.02. West Texas Intermediate crude rose 5% to US$50.38 per barrel on hopes that OPEC would bolster prices.

Lundin Mining rose 73¢ to $7.73 per share in the wake of a positive feasibility study on expanding the company’s Neves-Corvo zinc mine in Portugal. The feasibility study examined installing an underground crusher and conveyor system to handle ore from a deeper, higher zinc-grade area known as “Lombador Phase 2,” upgrades to the existing hoisting shaft, expansion of the zinc processing plant to 2.5 million tonnes per day and expansions to the tailings management facility, as well as other site infrastructure. The study included a forecast that annual zinc production would peak at 180,000 tonnes and average 150,000 tonnes per year from 2020–2030, along with an increase in lead production. The study estimated life-of-mine C1 cash costs of US28¢ per lb. copper net of by-product credits, or US29¢ per lb. zinc net of by-product credits. Preproduction capital costs of the expansion would run to €257 million, including a 15% contingency, with a payback period of less than four years. The expansion offers an incremental post-tax net present value of €180 million at an 8% discount rate and 22% internal rate of return. Lundin has approved the expansion project, pending approval of an Environmental Impact Assessment.

Shares of Mason Resources jumped 61.5% to 21¢ since listing on the TSX on May 12. Mason Resources’ Ann Mason and Lordsburg assets were spun out earlier this month from Entrée Resources (formerly Entree Gold). The new junior says its flagship Ann Mason project in the Yerington district of Nevada is the fourth-largest undeveloped copper porphyry resource in Canada and the United States. A preliminary economic assessment on Ann Mason this year includes results of a detailed metallurgical program completed in 2016. Mason Resources holds a US$8.8-million cash balance and has 77.8 million shares issued and outstanding.

Treasury Metals’ shares jumped 23% to 75¢ apiece. The junior completed a financing that raised $8.1 million for its wholly owned Goliath gold project in northwestern Ontario. The company plans on developing an open pit mine to feed a 2,500-tonne-per day plant, with subsequent underground operations.

The company has 77.8 million shares issued and outstanding, along with an US$8.8-million cash balance.