US Markets

U.S. factory output contracted in May for the second time in three months and consumer prices fell 0.3%, but news late in the week that major central banks were prepared to take collective action to provide liquidity and prevent a credit squeeze — should elections in Greece trigger bedlam in financial markets — lifted U.S. equities. The Dow Jones Industrial Index climbed 212.97 points, or 1.70% to 12,767.17, while the S&P 500 advanced 17.18, or 1.30%, to 1,342.84.

Randgold Resources topped the list of value gains, up US$5.11 to US$92.70 per share on no news, while Agrium claimed the second-largest advance, jumping US$2.68 to US$82.17. The Calgary-based company announced that it expects first-half earnings will be near its guidance range of US$5.50 to US$6.10 diluted earnings per share on continuing operations.

Shares of Cameco rose US$1.44 to close at US$20.67 on news that it had closed its $150-million agreement with Areva Resources to buy its 27.94% stake in the Millennium uranium project. The deal increases Cameco’s interest in the Athabasca basin project to 69.9%. The remaining 30.1% stake is owned by JCU (Canada) Exploration. Millennium is a proposed uranium mine with indicated resources of 50.9 million lb. uranium oxide (U3O8) with 507,800 tonnes at an average grade of 4.55%, and 16.7 million lb. U3O8 with 297,800 tonnes at an average grade of 2.54%. Under the agreement, Areva receives a 4% royalty on revenue from 27.94% of any production that exceeds 63 million lb. U3O8 from the project.

Royal Gold was down US$1.62 to US$77.49 on news that it had priced an underwritten public offering of US$325-million convertible senior notes due 2019, and has granted the underwriters a 30-day over-allotment option to purchase notes worth up to US$45 million. The initial conversion price — about US$105.31 per share — represents a premium of 35% to the US$78.01-per-share closing price of Royal Gold’s stock on the Nasdaq on June 14. The company plans to use the proceeds to repay its term-loan facility and for general corporate purposes, including potential acquisitions.

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