Toronto Stock Exchange, Oct. 21-25

The period was a good one for gold, and as the yellow metal went up, so too did the broader index, with the S&P/TSX Composite Index up 250 points to 13,399.42 points, and gold up US$36 to US$1,352.50 per oz.

Strong metal prices and solid third-quarter earnings reports helped gold miners fuel the rally, and the S&P/TSX Global Gold Index gained 16 points to finish at 187.98 points.

Not that the gains in the broader index were all about gold. Canadian equities also benefitted from a renewed sense of optimism after the U.S. government reopened for business, and investor expectations that the U.S. Federal Reserve’s tapering will be postponed, which could be good for growth. 

Diversified miners had a strong period, as the S&P/TSX Capped Diversified Metals & Mining Index was up 35 points to 841.54 points, despite the copper price being off slightly, as it was down 2¢ to finish at US$3.27 per lb.

No company was basking in the renewed interest in gold more than Barrick Gold. The world’s biggest gold producer broke out of a funk, as its shares were up $1.06 to $21.07. Barrick enjoyed an upgrade to “overweight” from “neutral” at HSBC, after reporting positive operating results. The HSBC report also heralded the sale of the Yilgarn South assets in Australia to South Africa’s Gold Fields, a slower ramp-up at Pueblo Viejo and its Pascua-Lama permit being held up by Chilean courts.

Agnico Eagle Mines was also feeling the market love, as it beat analyst estimates and raised its production forecast. Despite profits being down 56% year-over-year, its net income of US$47.3 million — or 27¢ per share — still looked good to investors, and the company’s stock was up $5.27 to $32.24 per share. It had kept production costs low — total cash costs came in at US$591 per oz. — while driving production higher to 315,828 oz. gold in the quarter.

Teck Resources shares were up $1.04 to $32.03, thanks to third-quarter adjusted profits of $252 million, or 44¢ per share. That was enough to beat estimates despite lower product prices, compared to the same time last year.

Centerra Gold was hit hard by word that the Kyrgyzstani parliament rejected a deal between the government and the company over its Kumtor gold mine. The deal called for setting up a joint venture in which both Centerra and the Kyrgyzstani government would own 50%. The government has a 33% stake. The parliament wants country’s ownership to increase to 67%, with a December deadline. Centerra shares were off 19% to $4.19 for the period.

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