US markets post marginal increase, Sept. 18-22

The Dow Jones Industrial Average inched up 0.37% to 22,349.59 and the S&P 500 Index rose 0.08% to 2,502.22. The Philadelphia Gold and Silver Index fell 2.63% to 86.06, as the gold price dropped US$22.10 per oz. (1.68%) to finish at US$1,297.10 per ounce.

News of a significant financing sent McEwen Mining’s shares down US52¢ to US$2.06. The company closed a US$46.6-million bought deal and will use the proceeds to buy the Black Fox complex, an underground gold mine in Timmins. A total of 20.7 million shares of common stock and warrants to buy up to 10.4 million shares were sold at a price of US$2.25 per share and associated one-half warrant. Each whole warrant entitles the holder to buy one share at a US$2.70-per-share exercise price until Sept. 28, 2018. “The opportunity to buy Black Fox came together quickly and the time frame to close was short, which meant that our financing options were limited to a bought deal or the issuance of debt,” Rob McEwen, the company’s chairman and owner, said in a news release. “Weighing the alternatives, we decided that this offering represented the best option for our shareholders at this time.” Black Fox will produce 50,000 oz. gold in 2018, increasing the company’s total gold-equivalent production by 16% from 157,000 oz. in 2017 to 182,000 oz. in 2018. “Black Fox reminds me a lot of the early days of the Red Lake mine, when I was building Goldcorp,” McEwen said. “The mine is shallower than many of the larger mines in the Timmins area, and some of its best high-grade zones extend near the bottom of the known mineralization, suggesting there is good potential to grow the deposit at depth.”

Shares of Pretium Resources rose US56¢ to US$9.23. Management updated shareholders on the ramp-up at its Brucejack mine in British Columbia, saying it is targeting steady production for the end of 2017. Pretium said the grade is ramping up, the mill is exclusively processing stope ore, and production of doré and flotation concentrate has increased. The company expects positive working capital soon.