TSX dips while gold rises, March 20-24

U.S. President Donald Trump’s failure to repeal and replace Obamacare put downward pressure on global stock markets and drove up the price of safe haven assets like gold. The S&P/TSX Composite Index fell 0.31% to 15,442.67 and the S&P/TSX Global Mining Index lost 1.18% to settle at 66.37. By contrast, the New York spot price of gold rose 1.13%, or US$14.10 per oz., to finish the week at US$1,242.90 per oz., and the S&P/TSX Global Gold Index rose 2.17% to 211.14.

An updated resource estimate for its 100%-owned McCoy-Cove property in Nevada sent the shares of Premier Gold Mines up 22.4% to $3.12. The project’s indicated resources rose 59% to 614,000 tonnes grading 11.57 grams gold per tonne for 228,000 ounces of contained gold, and inferred resources jumped 374% to 3.38 million tonnes grading 12.17 grams gold per tonne for 1.32 million oz. contained gold. The resource also demonstrated significant increases in grade, with the indicated grade rising 11% and the inferred grade up 24%. The previous resource estimate was completed in 2013. The company also confirmed that it will undertake a preliminary economic assessment of the high-grade project, which it hopes to finish in the second half of 2017. Premier believes there is “exceptional exploration potential” on the property, 52 km south of Battle Mountain in Lander County. The company noted that it plans to drill 17,000 metres at the project this year, and that its US$5 million exploration program will focus on infill drilling at the Helen and Gap deposits as well as testing priority exploration targets across the property.

Shares of Detour Gold rose 82¢ to $16. The company unveiled details of its new life-of-mine (LOM) plan for its Detour Lake gold mine. The company modified the LOM plan as a result of permitting uncertainties associated with its West Detour project. Development of the West Detour pit is now anticipated to start in 2025 and the development of the North pit is scheduled to start in 2019. Under the new plan, average LOM production was trimmed to 656,000 oz. gold per year, down from the previous 671,000 oz. gold per year. Detour says the main impact of the West Detour delay on production is an increase in the strip ratio over the next five years (an increase of 40 million tonnes of waste). Sustaining capital costs over the new LOM are estimated at $2.5 billion, about 34%, or $640 million, higher than the prior LOM, due primarily to higher maintenance, tailings, and mill costs.  Total site costs over the new LOM are projected to average US$758 per oz. sold compared to US$701 per oz. sold in the prior LOM. The company also reported reserves of 530.2 million tonnes at 0.97 gram gold per tonne for 16.5 million contained ounces of gold as of Dec. 31, 2016.