TSX dips slightly, Jan. 22-26

Canada’s benchmark index fell 0.69% to close the trading week at 16,239.20. The S&P/TSX Global Mining Index fell 0.13% to 75.23 while the S&P/TSX Global Gold Index rose 1.55% to 200.71. West Texas Intermediate crude rose 4.37% to US$66.14 per barrel and the gold price rose 1.4% to US$1349.30 per ounce.

Shares of Brio Gold rose 76¢ to $2.46. On Jan. 23, 2018, Leagold Mining announced it would make an offer to acquire all outstanding shares of Brio by Feb. 28, 2018. Holders of Brio shares would receive 0.92 of a Leagold share for every Brio share held, representing an implied $2.80 per Brio share and a US$264-million consideration of all issued and outstanding Brio shares.

Leagold is trying to expand its presence in Latin America since acquiring the Los Filos gold mine in Mexico from Goldcorp in April 2017. Brio already has several assets in production in Latin America, and Leagold expects that if it completes the deal, the combined operations would produce 450,000 oz. gold in 2018.

Brio is expected to produce 205,000 to 235,000 gold oz. in 2018. In a prepared statement, Brio president and CEO Gil Clausen noted that Brio must “protect the interests of our shareholders and consider all alternatives to maximize shareholder value.”

Shares of Endeavour Mining rose 89¢ to $25.69. Early in January 2018, it announced it had sold its 90% stake in the Nzema gold mine — located in Ghana’s Ashanti gold belt — to BCM International for an initial US$38.5 million. It expects to receive deferred payments of up to US$25 million by the end of 2019. The other 10% of the Nzema mine is held by the Ghanaian government.

Nzema entered production in 2011. According to Endeavour, the mine produced 87,710 oz. gold at an all-in sustaining cost (AISC) of US$1,167 per oz. in 2016 and 53,334 oz. at a  US$967 per oz. AISC in the first half of 2017.

Endeavour has five active mines in Africa. In September 2017 it began building a carbon-in-leach expansion to its heap-leach Ity gold mine in Côte d’Ivoire. The Ity mine has produced for 20 years and Endeavour expects the expansion will extend the mine’s life by 14 years.

Shares of Pretium Resources fell 31% to $9.42. The company’s stock tanked after it announced lower-than-expected fourth quarter production from its Brucejack gold-silver mine in British Columbia. Brucejack hit commercial production on July 1, 2017. For the year, gold production totalled 152,484 oz., but fourth-quarter production dropped 12,000 to 70,281 oz. compared to the previous quarter.

The company expects the AISC at Brucejack will rise as high as US$900 per oz. gold in 2018. The AISC at Brucejack was US$788 per oz. in the third quarter of 2017, when the company predicted it would decline. TNM