US markets inch higher, April 18-22

It was a relatively quiet week on the U.S. economic front. The Dow Jones Industrial Average finished at 18,003.75, a 0.6% gain, while the S&P 500 Index advanced 0.5% to 2,091.58. Base metal prices also rose slightly. Copper climbed 4.3% to US$2.27 per lb., nickel was up 2% to US$4.11 per lb., lead rose 4.5% to US81¢ per lb. and zinc gained 2.1% to US86¢ per lb. Spot gold moved in the opposite direction, slipping US$1.90 to US$1,232.20 per oz. The Philadelphia Gold & Silver Index rose 3.8% to 80.85.

Shares of Rio Tinto climbed US$1.89 to US$33.56 per share. The miner said it would use its strong liquidity position to reduce gross debt and launched cash tender offers targeting US$1.5 billion of its 2017 and 2018 notes. First-quarter production results meanwhile saw iron ore shipments up 11% year-on-year; bauxite production up 6%; alumina production up 7%; and aluminum production up 10%. Mined copper production was 27% higher quarter-on-quarter. Rio Tinto also divested its Bengalla coal mine, sold its Mount Pleasant coal project and extended its historic Channar mining joint venture with China’s Sinosteel for another five years. Now in its 30th year, the joint venture owns the Channar mine in the Pilbara.

Newmont Mining’s shares gained US$1.86 to US$31.23. The company reported first-quarter results with adjusted net income of US$182 million, or US34¢ per share, compared to US$229 million, or US46¢ per share, in the first quarter of 2015. Free cash flow from continuing operations was US$227 million, down from US$344 million in the first quarter of 2015. All-in sustaining costs decreased from US$849 per oz. gold to US$828 per oz., while copper all-in sustaining costs dropped to US$1.33 per lb., from US$1.73 per lb. Newmont delivered 1.23 million oz. attributable gold and 38,000 tonnes copper, compared to 1.19 million oz. gold and 37,000 tonnes copper.

First-quarter production results at Dominion Diamond’s Diavik mine in the Northwest Territories lifted the company’s stock US$1.39 to US$12.23. Processing volumes in the first quarter were 17% higher year-on-year due to more mining and available stockpiled ore. Diamond recovery was 26% higher year-on-year.