TSX edges lower, Oct. 23-29

The S&P/TSX Composite Index finished in negative territory, losing 0.6% to end at 13,791.88 points. The S&P/TSX Capped Diversified Metals & Mining Index dropped 10.6% to 411.68. The S&P/TSX Global Gold Index retreated 1.8% to 142.91, as the spot gold price gave back US$20 per oz. to close at US$1,146.80.

Barrick Gold shares added 34¢ to close at $10.31 on 22.9 million shares traded, after reporting strong third-quarter results. Adjusted earnings were US$131 million, or US11¢ per share, beating analysts’ expectations of US7¢ per share. Quarterly production came in at 1.66 million oz. gold — relatively flat from the same period last year — while all-in sustaining costs dropped nearly 8% to US$771 per oz. The miner generated US$256 million in free cash flow, excluding US$610 million on a streaming deal. It is on track to meet its annual US$3-billion debt reduction target.

Goldcorp was the period’s second value-loser, retreating $2.59 per share to $17.32, on the back of disappointing third-quarter financials. Adjusted loss came in at US$37 million, or US4¢ per share, which included US$40 million of reduced carrying values of inventory stockpiles and US$14 million of non-cash, stock-based compensation costs. Analysts had expected US4¢ in adjusted earnings per share, with some noting Goldcorp hasn’t adapted to lower commodity prices. Quarterly production came in at 922,200 oz. gold at all-in sustaining costs of US$848 per oz. “Stronger performances from Penasquito, Eleonore and Cerro Negro helped offset a shortfall at Red Lake that was disappointing on lower ore grades,” CIBC analyst David Haughton writes. He has a US$19 target price and an “outperform” rating on the stock.

Yamana Gold was one of the heaviest traded stocks, slipping 19¢ per share to $3.01, on 24.7 million shares traded. The gold miner reported a third-quarter adjusted loss of US$20.2 million, or US2¢ per share, down from a loss of US$1.3 million, or nil per share, in the same period last year. Revenues fell 9% to US$448.9 million, as higher gold and copper sales were more than offset by lower metal prices. The average realized price for gold slid 12% to US$1,122 per oz., while the average realized price for silver dropped 23%, and decreased 9% for copper. Yamana sold 317,859 oz. gold, 2.25 million oz. silver and 29.1 million lb. copper, excluding sales from its equity interest in its Alumbrera copper-gold mine in Argentina. Raymond James analyst Phil Russo says the quarterly results were in-line with his expectations, pointing out the nine-month delay during the quarter on expected production from the Cerro Moro gold-silver project in Argentina. The analyst says that the recent streaming deal with Sandstorm Gold and an expected monetization of the Brio Gold subsidiary by year-end should make the company’s balance sheet more flexible. Russo has a US$4.50 target and an “outperform rating” on the stock.