TSX falls, March 2-6: Balmoral, Equinox, Maya Gold & Silver

The S&P/TSX Composite Index fell 0.54% to 16,175.02. The S&P/TSX Global Mining Index rose 3.84% to 74.17, while the S&P/TSX Global Base Metals Index fell 4.94% to 81.10. Spot gold jumped US$87.60 per oz. or 5.53% to finish the trading week at US$1,673.10 per oz., sending the S&P/TSX Global Gold Index up 11.92% to 240.63.

Shares of Balmoral Resources jumped 55% to 48¢ on news that it is being acquired by Wallbridge Mining in an all-share deal worth $110 million. Under the terms of the transaction, Wallbridge and Balmoral shareholders will own 82% and 18% of the pro-forma company, respectively. The deal represents a 46% premium to Balmoral’s 20-day weighted average price on the Toronto Stock Exchange. The transaction will consolidate the Fenelon gold property within the Abitibi greenstone belt to 86 km. Wallbridge’s 10.5-sq.-km share of the Fenelon gold property includes the Main Gabbro, Area 51 and Tabasco zones. Last year, Wallbridge drilled 75,000 metres at the project, expanding the Fenelon gold system to 2 km of strike, over a width of 600 metres and down to a depth of 700 vertical metres. Wallbridge’s portion of the property includes underground workings with existing ramp access as well as a water treatment plant and a 79-person camp. Balmoral’s 75-sq.-km portion of Fenelon features extensions of the Area 51 gold system. Balmoral holds over 700 sq. km of ground along the Sunday Lake and Lower Detour deformation zones within the Abitibi greenstone belt.

Equinox Gold reported 2019 production of 201,018 oz. gold at all-in sustaining costs of US$931 per oz. sold. Its Aurizona mine in Brazil, which achieved commercial production on July 1 2019, produced 75,282 oz. at AISCs of US$928 per oz., and Mesquite in California produced 125,736 oz. gold at AISCs of US$933 per oz. The company posted a net loss of US$20.3 million or 16¢ per share, which included non-cash losses related to the change in fair value of derivative liabilities related to warrants with a Canadian dollar exercise price, and the early debt settlement of US$14.1 million after refinancing debt with a new revolving credit facility. Equinox’s merger with Leagold is expected to close in the second week of March. Shares of Equinox closed at $11.73, a weekly gain of $2.00 per share.

Maya Gold & Silver jumped 52.4% to $1.25 after reporting new drill results from the Imarighen and Northern zones at its Boumadine polymetallic mine in Morocco. Highlights included 2.5 metres grading 2.27 grams gold per tonne and 80 grams silver per tonne from 149 metres in drillhole 19-25; 2 metres of 2.13 grams gold and 196.45 grams silver in drillhole 20-02 from 77.5 metres, and 3 metres of 1.25 grams gold and 5% zinc in drillhole 20-06 from 55 metres. Surface sampling returned 16.47 grams gold; 10.96 grams gold; and 10.16 grams gold. Boumadine is in the Anti-Atlas mountains of eastern Morocco. The company also owns 85% of the producing Zgounder mine, also in Morocco.