TSX slips as gold stumbles, July 23-27

Canada’s benchmark index fell 0.25% to 16,393.95. The S&P/TSX Global Mining Index rose 0.98% to 72.68, while the S&P/TSX Global Gold Index fell 3.58% to 182.08. The gold price fell 0.67% to US$1,223.2.

Shares of Alacer Gold rose 11.4% to $2.93. In July the company reported positive drill results from its Ardich gold prospect in Turkey, near the company’s producing Copler gold mine. The company announced results from another 25 holes on the prospect to go with results from 18 previously announced holes. Highlights include 3.01 grams gold per tonne over 50 metres from 43 metres downhole and 2.21 grams gold over 69 metres from 36 metres downhole. Mineralization at Ardich is open in all directions. The company says initial metallurgy indicates the ore is suitable for heap leaching.

The company, however, reported a net loss for 2018’s second quarter of US$23.4 million, down from a US$29.5-million net profit in the same quarter of the previous year. For the first half of 2018, the company reported an US$11.4-million net profit, down from US$41.7 million the previous year.

Shares of New Gold fell 34.1% to $1.64 after the company announced it was lowering its production guidance for 2018, from as much as 595,000 oz. gold to as much as 480,000 oz. gold. It attributed the decrease to “variability in the process facility’s start-up performance and lower gold grade and recoveries” at its Rainy River gold mine, which is in its first year.

New Gold expects Rainy River will produce 250,000 oz. gold, down from as much as 350,000 oz. gold. It also cut the production guidance from its Cerro San Pedro gold mine in half, down to as much as 15,000 oz. gold.

All-in sustaining costs rose as a result of the lower-than-expected production to as much as US$1,120 per oz. gold, compared to original estimates of as much as US$900 per oz. gold.

The company added that it has finished an updated life-of-mine plan for Rainy River that it will release this August.

Shares of First Quantum Minerals rose $1.15 to $19.05. The company produced 150,950 tonnes copper in the year’s second quarter — up from 141,912 tonnes copper a year ago — as sales rose to 152,403 tonnes copper, versus 139,521 tonnes copper a year ago. However, all-in sustaining costs also rose 26¢ per lb. copper to US$1.76.

The company’s gold production fell to 46,467 oz. gold for the quarter, down from 50,040 oz. gold a year ago. Gold sales also fell to 48,172 oz. gold for the quarter, down from 52,020 oz. gold a year ago.

The company is also facing labour disputes at its Cobre las Cruces copper mine in Spain, where it was reported that 85% of the 800-person workforce has gone on strike. The strikers are demanding “toxic bonuses” for subcontractors.