TSX rises, Sept. 18-22

During a relatively quiet week politically, Canada’s benchmark index rose steadily to 15,454.23 — a 1.85% gain — while the S&P/TSX Global Mining Index rose 0.24% to 66.34 and West Texas Intermediate crude closed at US$50.66 per barrel. Gold, however, did not perform as well. The price of gold fell 1.67% to 1297.10 per oz. and the S&P/TSX Global Gold Index fell 1.87% to 197.05.

Teck Resources rose $1.42 to $27.17 per share, but fell sharply Sept. 25 to $26.73. The company reported quarterly revenues of $2.8 billion, up $1.1 billion from a year ago. This was in part due to increased steelmaking coal sales, which were up 6.9 million tonnes from 6.3 million tonnes a year ago. Zinc production reached a record high for the company of 102,300 tonnes in the quarter. Sales of zinc-in-concentrate also contributed with a rise from 95,000 tonnes to 113,000 tonnes over last year. The average price of zinc during the quarter was US$1.18 per pound. Steelmaking coal and zinc were the two largest contributors to revenue at $1.6 billion and $660 million. Gross profit for steelmaking coal was also up over last year, at $785 million compared to $52 million. Cash flow from operations was also up over last year to $1.4 billion.

Shares for Agrium rose $5.07 to $133.17. On Sept. 11 the company announced that it had received approval from the Canadian Competition Bureau for its proposed merger with PotashCorp. The merger had already received clearance in Brazil and Russia, although the approval process continues in China, India and the United States. Agrium’s potash production almost tripled compared to the same quarter last year. Sales volumes were 2% higher, with a 31% increase in international volumes resulting in a 14% drop in domestic volumes over last year. However, the company’s share prices remain consistent with last year. Agrium ended the quarter with US$319 million in cash and equivalents, but US$1.2 billion in short-term debt. During the first half of 2017, Agrium’s short-term debt almost doubled. The company remains in compliance with the debt-to-capital ratios outlined by their revolving credit facilities.

Shares of Largo Resources fell 31% to 88¢. The company reported second-quarter revenues of $35.8 million in a $20-million increase over the previous year. Its expenses for the quarter totalled $49.7 million, resulting in a $13.9-million net loss. Vanadium production from its Maracas Menchen mine in Brazil increased 120 tonnes in the second quarter to 2,182 tonnes, but was still below last year’s output of 2,311 tonnes. A Largo report attributes the decline in productivity to a planned kiln refurbishment that began in March and ended in April. The company has $12.4 million in cash and $349.3 million in total assets. Operating costs for the second quarter totalled $29.9 million for a net loss of $13.9 million.