TSX posts slight gain, May 13-17: Barrick, Franco-Nevada, Roxgold

The S&P/TSX Composite Index rose 0.64%, or 104.20 points, to 16,401.80. The S&P/TSX Global Mining Index increased 0.11 points, or 0.15%, to 71.55, while the S&P/TSX Global Base Metals Index fell 2.75 points, or 2.48%, to 107.96, and the S&P/TSX Global Gold Index climbed 3.96 points, or 2.23%, to 181.21. Spot gold fell US$8.70 per oz., or 0.68%, to finish the trading week at US$1,277.10 per ounce.

Shares of Barrick Gold were the most heavily traded and rose 36¢ to $16.45. Barrick unveiled the name of the new joint venture with Newmont Goldcorp as Nevada Gold Mines, and said it was “a classic case of the whole being more valuable than the sum of its parts”. Nevada Gold Mines will have three Tier One gold mines: Barrick’s Cortez; the combination of Barick’s Goldstrike and Newmont Goldcorp’s Carlin; and Barrick’s Turquoise Ridge with Newmont Goldcorp’s Twin Creeks. Barrick defines a Tier One asset as a mine with a stated life in excess of ten years with 2017 production of at least 500,000 oz. gold and total cash cost per oz. within the bottom half of Wood Mackenzie’s cost curve tools. Barrick owns 61.5% and Newmont Goldcorp 38.5% of the joint venture, whose assets produced more than 4 million oz. gold in 2018. Barrick posted a strong start in the first quarter, with net cash from operations rising 27%, net earnings per share increasing by 106% to 6¢, adjusted net earnings per share rising by 83% to 11¢, and debt, net of cash, falling 12% to $3.65 billion. The company declared a dividend of 4¢ per share.

Franco-Nevada topped the list of value gains with a jump of $4.05 per share to $102.22. The company reported record revenue and net income in the first quarter of US$179.8 million and US$65.2 million, or 35¢ per share, respectively. It also increased its quarterly dividend from 24¢ to 25¢ per share, which marks the twelfth consecutive annual dividend increase for shareholders. Geographically, the gold-focused royalty and stream company’s revenue was sourced 81.6% from the Americas — 41.7% from Latin America, 18.3% from the U.S., and 21.6% from Canada.

Roxgold delivered a strong first quarter with production of 33,652 oz. gold at all-in sustaining costs per oz. sold of US$775 per ounce. The company mined 98,140 tonnes and achieved a record quarterly throughput of 106,816 tonnes, which exceeded its increased nameplate capacity of 1,100 tonnes per day by about 8%. It anticipates stronger quarters in the second half of the year due to the commencing of stoping operations at its Bagassi South mine. Roxgold expects to produce between 145,000 and 155,000 oz. gold this year at all-in sustaining costs of US$765 to US$795 per ounce. The company has earmarked US$10 million to $12 million for exploration in 2019. The company’s shares gained 3¢ to 92¢.