US markets post marginal gains, Aug. 21-25

The Dow Jones Industrial Average advanced 0.64% to 21,813.67 and the S&P 500 Index rose 0.72% to 2,443.05. The Philadelphia Gold & Silver Index increased 2.29% to 85.82.

Freeport-McMoRan was the second most traded stock and closed at US$15.29 per share, up US$1.14, or 8.1%, on no news. The Arizona-based mining company announced that it had reached a framework agreement with the Indonesian government concerning its long-term operating rights in the country. The government is letting Freeport operate its Grasberg mine in Papua in exchange for relinquishing its majority ownership in the asset. Freeport has also agreed to boost its investment in smelting in Indonesia. The agreement, which requires approval from Freeport’s board and partners, includes converting Freeport’s contract of work to a special licence that will give the company long-term operating rights through 2041. In return, Freeport agrees to divest its ownership in PT Freeport Indonesia (PT-FI) at fair market value so that Indonesia interests own 51% of PT-FI’s shares, and commits to build a smelter in Indonesia within five years. Freeport is the world’s largest publicly traded copper producer.

Shares of AngloGold Ashanti were off 9% — down US88¢ to US$8.94. The company reported that group production in the first half of the year was slightly higher than in the first six months of last year (1.748 million oz. versus 1.745 million oz.), but all-in-sustaining costs rose to US$1,071 per oz., up from US$911 per oz. in mid-2016. The higher costs reflected stronger operating currencies, lower grades, cost inflation and planned increases in sustaining capital expenditure. Capital expenditure (including equity-accounted investments) rose 43% to US$454 million in the first half, up from US$318 million in the same period last year. The increase owed to more spending on assets aimed at improving mine lives and cost profiles across the company’s portfolio. Adjusted earnings before interest, tax, depreciation and amortization was US$610 million in the first six months of 2017, down 22% from US$781 million reported in the first half of last year. AngloGold kept its guidance for the year of between 3.6 million and 3.75 million oz. gold at AISCs of between US$1,050 and US$1,100 per ounce. TNM