TSX inches higher while gold dips, June 11-15

Canada’s benchmark index rose 0.68% to 16,314.42 during a mixed week. The S&P/TSX Global Mining Index fell 1.9% to 75.17. The S&P/TSX Global Gold Index rose 1.3% to 191.66, while the gold price fell 1.5% to US$1,278.9.

Shares of Katanga Mining jumped 24% to $1.30 on news it had settled legal proceedings brought against it by its joint-venture partner — Democratic Republic of the Congo government-owned Gecamines — on April 20, 2018, over what Gecamines called a failure by Katanga to address capital shortfall at the Kamoto Copper mine. Kamoto had US$9.2 billion in debt at the end of December 2017, leading to a US$4.2-billion shortfall in working capital.

The settlement had two key terms: that Katanga pay Gecamines US$150 million on June 14, 2018; and resolve Kamoto’s capital deficiency by restructuring long-term debt, and lowering total debt to a maximum of US$3.45 billion.

Kamoto produced its first copper cathode in December 2007. It resumed production after a two-year hiatus in December 2017, during which Katanga funded an upgrade to the processing facility. Glencore, which owns 86% of Katanga, expects Kamoto will produce up to 300,000 tonnes copper and 34,000 tonnes cobalt in 2019, making it the DRC’s biggest copper mine. 

Shares of Nutrien rose $2.51 to $70.60. At the end of May the company auctioned its remaining stake in Chile lithium miner SQM for nearly US$1 billion. The move fulfills the last regulatory requirements from the merger between Agrium and Potash Corp. of Saskatchewan that formed the company in January.

Earlier in the month, Tianqi Lithium announced it would buy almost a quarter of SQM from Nutrien for US$4.1 billion. In June, Chilean anti-trust regulator FNE said it would investigate the purchase for “anti-competitive risks in Chile.” Three months ago, the Chilean government asked regulators to investigate a potential Tianqi-SQM merger.

Shares of Endeavour Mining rose 61¢ to $23.71. The company announced two high-grade discoveries that extend mineralization in the Kari area at its producing Houndé gold mine in Burkina Faso.

After last year’s Kari Pump discovery, the company drilled more than 1,000 holes comprising 76,000 metres in the wider Kari area, extending the mineralized zone to 12 sq. km, with 25% of the gold-in-soil anomaly still undrilled. Kari has three zones: Kari Pump, Kari Center and Kari West. Endeavour has begun an additional 65,000-metre drill campaign to delineate the three areas. It plans to infill drill Kari Pump and table a resource by year-end.