Job losses drive down TSX, July 7-11

Poor jobs data showing that Canada lost 9,400 jobs in June, sending the unemployment rate up to 7.1% from 7% in May, put pressure on the Canadian dollar and the S&P/TSX Composite Index. The dollar ended the week at $1.0734 to the greenback, or US93.16¢, while the S&P/TSX Composite Index fell 89.46 points or 0.59% to 15,125.50. On the bright side, shares of many gold miners rallied. The S&P/TSX Global Gold Index rose 9.25 points, or 4.75% to 203.92, while the S&P/TSX Capped Diversified Metals & Mining Index advanced 22.42 points, or 2.48% to 926.18. 

Shares of Royal Gold surged $3.67 to $84.10 — the largest gain of the week. The royalty and streaming company reported that it received about 21,900 oz. gold for the quarter ended June 30 from Thompson Creek’s Mt. Milligan mine. Royal Gold said it sold 14,400 oz. gold from Thompson Creek in the three months ended June 30, and that it had 7,800 oz. gold left in inventory. Royal Gold received physical metal within two days of Thompson Creek recording the sale, and sold most of the delivered gold within three weeks of receipt. 

Agnico Eagle Mines advanced $2.87 to $43.86 per share. The company announced it exercised 19.8 million warrants of Pershimco Resources that it acquired under a private placement earlier this year. Agnico Eagle now holds 39.6 million common shares of Pershimco, or 17.8% of its issued and outstanding common shares. On July 8, Pershimco reported results from a prefeasibility study of its Cerro Quemo gold project in Panama, which outlined a low-cost, open-pit operation generating an average of 78,500 oz. gold a year over five years, with production starting in late 2016.

First Quantum Minerals reported on July 9 that it resumed construction activity at its Cobre Panama project on July 5 after resolving a dispute with the union over a new work roster. The company temporarily halted construction at the large open-pit copper development project in Panama on June 26 due to an illegal work stoppage by some construction workers. The workers were protesting working for 21 days with seven days off, compared with the earlier schedule of 12 days of work with two days off. First Quantum’s shares increased $1.21 to $26.25.

Endeavour Silver, which owns the Guanacevi, Bolanitos and El Cubo silver–gold mines in Mexico, saw its shares advance 84¢ to $6.66 on the back of strong silver production in the second quarter. The company produced 1.67 million oz. silver in the second quarter for a year-on-year jump of 9%. Gold production, however, decreased 24% year-on-year to 15,136 oz., largely due to overproduction at its Bolanitos mine in 2013. On the exploration front the company has 12 drill rigs working at the three mines, in addition to its silver–gold discovery on the San Sebastian property.

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