TSX ends in positive territory, Feb. 18-22: Teck, Torex, Osisko Gold Royalties

The S&P/TSX Composite Index rose 1.10% to finish the trading week at 16,013. The S&P/TSX Global Mining Index increased 3.40% to 75.49, while the S&P/TSX Global Base Metals Index jumped 6.40% to 118.89. Spot gold closed higher at US$1,337.80 per oz., up US$16.40 per oz., or 1.24% week-on-week, and the S&P/TSX Global Gold Index gained 3.35% to 196.64.

Fitch Ratings upgraded Teck Resources’ issuer default rating and unsecured debt and facility ratings to BBB — with a stable outlook. The move follows the upgrade of Teck’s credit rating to Baa3 with a stable outlook by Moody’s Investors Service in January. With investment-grade ratings from the two agencies, Teck is no longer required to keep letters of credit to satisfy the financial security requirements under the long-term power purchase agreements for the Quebrada Blanca phase two project, which allows the company to terminate US$672 million of letters of credit supporting the agreements, the company says. Instead, Teck will provide guarantees in place of the letters of credit. Teck’s B shares gained $2.55 to $31.21, and its A shares advanced $2.13 to $31.08.

Shares of Torex Gold jumped $2.09 per share to finish at $16.34. The company reported record gold production in 2018 of 353,470 oz., at the top end of guidance. Net income after current and deferred income tax expenses came in at US$23.2 million, or 27¢ per share, on a basic and diluted basis for the year. Total cash costs were US$646 per oz. gold sold, while all-in sustaining costs totalled US$964 per oz. gold sold. Cash flow from operations reached US$226.8 million for the year, and the company ended 2018 with US$149 million in cash, including restricted cash of US$26.8 million. The company lowered its debt facility during the year to US$333.5 million by making principal repayments of US$56.3 million.

Osisko Gold Royalties advanced $1.53 to $15.04 per share on strong 2018 revenues and cash flow. The company reported a record 80,553 attributable gold-equivalent ounces in 2018 — a 37% increase over 2017 — and forecast between 85,000 and 95,000 GEOs in 2019. The company generated cash flows from operating activities last year of $82.2 million — a year-on-year jump of 69%. It recorded adjusted annual earnings of $31.4 million, or 20¢ per basic share, up from $22.7 million, or 18¢ per share in 2017. During 2018, the company bought back 2.71 million of its common shares for $32.9 million. At the end of December, it held $174.3 million in cash and equivalents, and $397.1 million in equity investments. The company declared quarterly dividends of 20¢ per common share for the year totalling $31.2 million, bringing the total to $86.3 million since inception in 2014. In a statement, Sean Roosen, the company’s chairman and CEO, said that in less than five years, Osisko Gold Royalties has “invested over $2.5 billion in royalty, streaming and offtake assets, as well as in our mining equity portfolio of emerging producers.”