TSX gold miners rise over May 1-5 trading week

Over the May 1-5 trading period, the S&P/TSX Composite Index shed 94.51 points or 0.46%, to close at 20,542.03. The S&P/TSX Global Mining Index gained 1.79 points or 1.58% to 114.98 and the S&P/TSX Global Base Metals Index was flat, inching up 0.42 points or 0.21% to 192.42. The S&P/TSX Global Gold Index rose by 14.3 points or 4.49% to 323.52 and spot gold ended the week US$18.40 per oz. higher, or 0.92%, at US$2,000.95 per ounce. The precious metal rose on recession fears, as well as worries about further potential bank failures in the U.S. as on May 3, the Federal Reserve raised interest rates by 0.25% to the highest level since 2007. 

With strength in gold, royalty and streaming company Franco-Nevada posted the highest gains by value. Its stock was up $7.30 to $212.88 per share even though on May 3 it reported weaker revenues in the first quarter. Revenues fell by 18.4% to $276.3 million from $338.8 million in last year’s first quarter as mine suspensions at First Quantum Minerals’ Cobre Panama mine in Panama and Glencore’s Antapaccay mine in Peru curtailed production. Franco-Nevada has gold and silver streams at both assets. 

The gold price outlook also buoyed other precious metals companies, including several that posted lower quarterly earnings during the week, SSR Mining, Wheaton Precious Metals and Equinox Gold. 

Freegold Ventures saw the greatest percentage gain, rising 36% to 68¢. The junior, which owns the Summit gold project near Fairbanks, Alaska, didn’t release any news. But Freegold did recently raise more than $20 million for the project — a $16.5-million brokered private placement in March, and a $4-million non-brokered placement in April in which Eric Sprott was the sole investor. Sprott purchased 10 million units (each comprised of a share and half a warrant) at 40¢ apiece, increasing his holding in Freegold to 27.2% from 25.8%. 

The company released an updated resource update for Summit in early March outlining 405.5 million indicated tonnes grading 0.92 gram gold per tonne for nearly 12 million oz., and 272.8 million inferred tonnes at 0.85 gram gold for 7.5 million oz.

Both classes of Teck Resources shares were down, with A-class shares losing $7.73 per share and B-class shares $4.74 per share. The Vancouver-based miner’s future is still uncertain, with Glencore still in pursuit despite the Teck board’s rejection of its US$23-million bid and federal politicians signalling their opposition. 

Taseko Mines shares fell 9.4% to $2.02 per share on first-quarter results showing a 2.4% drop in revenues to $115.5 million on a 7% decrease in production at its 87.5%-owned Gibraltar copper mine in B.C. The company also announced an at-the-market offering of up to US$50 million to pay for capital costs at Gibraltar and to advance its permitting-stage Florence copper project in Arizona.