TSX ends in negative territory, Aug. 5-8

The S&P/TSX Composite Index tumbled during the shortened trading week, losing nearly 19 points to 15,196.31. The S&P/TSX Capped Diversified Metals & Mining Index fell 15.57 points to 903.70. But gold miners stayed strong, with the S&P/TSX Global Gold Index climbing 4.79 points to 203.31. The spot price for gold added US$14.90 per oz. to close at US$1,309.10.

Imperial Metals was unsurprisingly the week’s biggest percentage loser after a tailings breach at its Mount Polley copper–gold mine in B.C. The dam at the tailings pond collapsed, spilling nearly 15 million cubic metres of waste water into nearby waterways. This amount is equivalent to 6,000 Olympic-sized swimming pools. Given the enormity of the spill, it will take a substantial time and money to clean up the sludge and debris. The cause of the breach is still under investigation. The producer lost 38% to close at $10.36.

It was a good week for Richmont Mines. The Montreal-based gold miner reported second-quarter adjusted profits of $5.7 million, or 12¢ per share, up from a net loss of $1.1 million, or 3¢ per share, in the same period last year. It recorded quarterly operating cash flows of $13.4 million and record revenues of $39 million. Given the strong performance to date, Richmont has bumped its annual production guidance to 75,000 to 85,000 oz. gold, from 70,000 to 80,000 oz. previously. It has also increased its ownership in the Island gold mine in Ontario to 100%.

Debt-burdened Mercator Minerals saw heavy trading volumes after reporting a second-quarter adjusted profit of $5.2 million, or 2¢ per share, up from an adjusted net loss of $10 million, or 3¢ per share, a year ago. Revenues climbed 9% to $69.8 million. That increase was largely due to higher realized molybdenum and copper prices, slightly offsetting the lower metal sales.

Mercator says it won’t release a production forecast for the rest of the year, as it’s considering its options after Russia’s Intergeo abandoned a takeover bid for the company, leaving the junior with its acute debt problems. The firm is looking at several alternatives, including selling the company or part of its assets, or merging with another firm. The firm advanced 18% to 7¢, on 19.8 million shares traded.

Royal Gold was the top value gainer, advancing $3.84 to $87.09. The precious metals royalty and streaming firm reported a strong June quarter, closing off its fiscal 2014 year. Quarterly net income increased 63% year-over-year to 26¢ per share, as both revenues and production increased. Royal Gold ended fiscal 2014 with a net income of $62.6 million, or 96¢ per share, down 12% from a year ago. It attributed that drop to the average gold price plunging 19% to $1,296 per oz. in fiscal 2014.

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