TSX falls while gold rises, March 19-23

Canada’s benchmark index moved lower and gold moved higher after the U.S. said it would impose US$50-billion worth of tariffs on Chinese exports, and China retaliated with import taxes on US$3 billion of U.S. goods. Worries about a full-blown trade war sent the S&P/TSX Composite Index down 3.10% to finish at 15,223.74, while spot gold jumped US$33.20 per oz., or 2.53%, to US$1,346.80 per ounce. The S&P/TSX Global Gold Index was up 2.5% while the S&P/TSX Capped Diversified Metals and Mining Index tumbled 7.1%.

News that the Zambian government believes First Quantum Minerals owes US$8 billion in import duties, penalties and interest on consumables and spare parts sent the miner’s shares plunging 18.1%, or $3.83, to $17.36. In a news release, First Quantum said it “unequivocally refutes this assessment, which does not appear to have any discernible basis of calculation,” and said it “will continue working with the ZRA, as it normally does, to resolve the issue.”

Shares of Eldorado Gold — the second most traded — plunged 17%, or 24¢, to $1.17. The company reported a 2017 loss attributable to shareholders of US$9.9 million, or 1¢ per share, compared to a loss attributable to shareholders in 2016 of US$344.2 million, or 48¢ per share. The gold producer posted adjusted net earnings of US$15.2 million, or 2¢ per share, last year, down from adjusted net earnings of US$47.4 million, or 7¢ per share, in 2016. Gross profit from gold mining reached US$121.2 million in 2017, and full-year gold production came in at 292,971 oz., which included pre-commercial production of 7,061 oz. from a bulk sample at its newly acquired Lamaque project in Quebec. All-in sustaining costs averaged US$922 per oz., slightly higher than guidance of US$915 per oz., while cash operating costs were US$509 per ounce. At year-end, Eldorado had US$485 million in cash and equivalents and term deposits, and US$250 million in undrawn lines of credit.

Kirkland Lake Gold rose 93¢ to $20.30 per share. The company announced a quarterly dividend payment of 2¢ per share for shareholders on April 13, in its fourth quarterly dividend payment since  adopting a dividend policy one year ago. Kirkland Gold is targeting over 620,000 oz. gold production this year from its mines in Canada and Australia.

Shares of Altius Minerals climbed $1.03 to $14.01, after it announced it is boosting its stake in Alderon Iron Ore. Altius is acquiring 18.8 million common shares of Alderon from Liberty Metals & Mining Holdings, bringing its total holdings in Alderon to 51.88 million shares, or 39% of the company. Alderon owns a 75% stake in the Kami iron ore project in Labrador, Canada. Altius holds a 3% gross sales royalty from selling the Kami deposits into Alderon. An updated preliminary economic assessment of the open-pit mine and concentrator outlined a 24-year mine life, with projected output of 7.8 million tonnes of concentrate grading 65.2% iron. T