US equities rally, July 11-15

Positive economic data for the month of June, including improved retail sales and industrial production, and a firming of inflation, extended the rally in U.S. equities. The Dow Jones Industrial Average advanced 2% to 18,516.55 and the S&P 500 Index rose 1.5% to 2,161.75. The gold spot price fell 2.1% to US$1,337.10 per oz., while the Philadelphia Gold & Silver Index climbed 0.5% to 107.73.

Mosaic rose 12.6%, or US$3.21, to finish at US$28.69, after it announced it would idle its Colonsay potash mine in Saskatchewan for the rest of the year and halt turnaround activities. The decision was made to remain competitive and adapt to “challenging potash market conditions.” About 330 employees have received temporary layoff notices. The company’s lower-cost Esterhazy and Belle Plaine mines, in combination with its current inventory, would help Mosaic meet its short-term potash supply needs, the company said.

Vale’s shares were the third most traded and rose US41¢ to US$5.36 apiece. The company reported it is unlikely that operations will resume this year at its half-owned Samarco mine in Brazil. (BHP Billiton owns the other half of the joint venture.) The mine was halted after a tailings dam breach on Nov. 5, 2015. Vale said Samarco filed an environmental impact study and an environment impact report to the State Department of Environment and Sustainable Development of Minas Gerais on June 23. The studies are part of licensing exhausted pits for tailings disposal. In another release, BHP confirmed that Samarco is unlikely to have the necessary approvals  to restart its operations in 2016.

Hecla Mining’s shares rose US15¢ to US$6.20 after reporting second-quarter production results. The Idaho-based silver producer — with operating mines in Alaska, Idaho, Mexico and Canada — produced 4.24 million oz. silver, in a 71.2% increase year-on-year, and 62,965 oz. gold, up 40.9%. (The company’s equivalent silver production rose 38.4% to 11.81 million oz., while lead production rose 9.1% to 10,391 tons and zinc production increased 3.5% to 18,132 tons. The company has raised its 2016 silver production estimate 5% to 15.75 million oz. and gold production 13% to 233,000 ounces. At the end of June, Hecla had US$157 million in cash and equivalents, and short-term investments.