TSX slips, Sept. 5-8

The S&P/TSX Composite Index fell 206.28 points to 14,985.32, as the Canadian dollar surged from US71¢ to US81.54¢ on news of an interest rate hike from the Bank of Canada. Ebbing concerns over North Korea’s nuclear ambitions drove spot gold prices down US$21.36 to US$1,345.59 per ounce. Comex copper prices lost US8¢ to US$3.04 per pound.

Centerra Gold topped the value-added category, with shares rising $1.29 to $8.78 on news of a potential settlement with the Kyrgyz Republic government over an environmental dispute at the firm’s Kumtor gold mine in the Central Asian nation. The proposed settlement would call on Centerra to pay a one-time lump sum of US$50 million to a governmental Nature Development fund and make annual payments of US$2.7 million. Centerra would pay another US$7 million to a governmental Cancer Care Support Fund and make a $3-million, one-time payment to the fund within a year of closing. Under the proposed agreement, Centerra would also invest US$6 million annually in a Kumtor Reclamation Fund based inside the country to a minimum of US$69 million. The dispute arose in 2016 when the government alleged that certain company mangers engaged in commercial transactions that harmed the state. The allegations coincided with a legal case in which the state demanded US$220 million in pollution fees.

Shares of New Gold rose 39¢ to $5 per share on a construction update of the company’s Rainy River gold project in northwestern Ontario. Both the project schedule and $515 million in capital costs remain in line with New Gold’s expectations. The company expects to process ore in September and ramp up to 60% of the 21,000-tonne-per-day capacity by November. Production guidance at Rainy River this year is between 50,000 and 60,000 oz. gold, including pre-commercial production of 15,000 oz. gold at all-in-sustaining-costs of US$1,200 to $1,240 per oz. gold. In the second quarter, New Gold produced 105,064 oz. gold across four of its operations — a 6% increase, compared to the same quarter last year. Adjusted net earnings for the quarter totalled $13 million, or 2¢ per share.

Pretium Resources gained 41¢ to $10.74 per share. On Aug. 10, the company announced its second-quarter results and commissioning update for its high-grade Brucejack gold mine in northwestern B.C.’s Golden Triangle district. During commissioning in June and grade ramp-up in July, the company produced 25,392 oz. gold from low-grade stockpiles, development muck and stope ore. The mill operated at near nameplate capacity, processing 83,667 tonnes of ore for an average 2,699 tonnes per day. During start-up, some of the gravity-recoverable gold was locked up within the semi-autogenous grinding and ball mills. A 4.7 kg grab sample from the trapped material graded 23,547 grams gold per tonne. The company plans to recover the gold after changing the mill liners, and will optimize recoveries in the gravity and flotation circuits. TNM