Hurricane Irma cools US markets, Sept. 5-8

The Dow Jones Industrial Average fell 0.9% to 21,797.8 points and the S&P 500 Index dropped 0.6% to 2,461.43 points, as investors braced for Hurricane Irma’s potential impact on U.S. markets.

Franco-Nevada led the value-added category, with shares gaining US$2.45 to US$84.58, after the company announced it would pay First Quantum Minerals US$178 million for another metals stream at Cobre Panama, one of the world’s largest copper-gold-silver-molybdenum porphyry projects. The project is 60% complete and is scheduled to produce in late 2018. Under the agreement, Franco-Nevada will pay 20% of the gold spot price and silver until 302,000 oz. gold and 4.8 million oz. silver have been delivered. The additional stream has higher margins than the existing stream for the current mine plan. First Quantum intends to use the proceeds of the transaction to partly fund its previously announced acquisition of a 10% interest in Cobre Panama from one of its joint-venture partners, LS-Nikko Copper.

A revised preliminary economic assessment (PEA) for McEwen Mining’s Los Azules copper project in Argentina drove shares of the company up 8%, or US21¢, to US$2.83. The study envisaged a 36-year, open-pit operation with an initial processing rate of 80,000 tonnes per day increasing to 120,000 tonnes per day by year five. The US$2.6-billion project has a US$2.2-billion, after-tax net present value, assuming an 8% discount rate, and a 20.1% internal rate of return, assuming US$3 per lb. copper, US$1,300 per oz. gold and US$17 per oz. silver. The company said in a press release that reforms introduced by the Argentine government to encourage mining investment by eliminating taxes on exported mineral concentrates prompted the revision of the 2013 Los Azules PEA. The company intends to pursue economic studies and advance permitting to move the project towards development.

Shares of Osisko Gold Royalties rose US44¢ to US$14.26. On Aug. 3, the company announced a 25% increase in its quarterly dividend to 5¢ per share, its second increase since the creation of the company three years ago. On Aug. 7, the company’s dividend reinvestment plan — available to investors registered in Canada — was extended to U.S residents. TNM