Toronto Stock Exchange, June 24-28

The Toronto Stock Exchange closed trading in positive territory, with the S&P/TSX Composite Index gaining 133 points, or 1.11%, to 12,129.11. Despite the boost, the index is down 2.45% year to date.

Ahead of the Canada Day long weekend,
 the S&P/TSX Global Gold Index fell less than a point to 170.40, and the S&P/TSX Capped Diversified Metals & Mining Index skidded 3 points to 705.56. The spot price of gold slumped US$63.30 per oz. to US$1,235.30. 

Gold stocks were heavily traded in the period, with Barrick Gold leading the pack at 35.7 million shares traded. After ending the week down $1.11 at $16.60 per share, the miner announced after markets closed on June 28 that it has delayed production from its troubled Pascua-Lama gold-silver project to mid-2016, from mid-2014 earlier. On the plus side, this allows the miner to cut capital requirements in 2013 and 2014 by US$1.5 to $1.8 billion. However, given much delay and tumbling metal prices, Barrick anticipates taking a US$4.5- to 5.5-billion impairment charge in the second quarter at its high-
altitude Pascua-Lama project, located on the Chile-Argentina border. 

Despite noting that deferring Pascua-Lama “is a step in the right direction,” BMO Capital Markets downgraded Barrick to “underperform,” citing free cash flow concerns. 

B2Gold also saw heavy trading after resuming production at its Masbate mill in the Philippines on June 22, after temporarily shutting down the facility when it found minor leaks at the tailings liner in early June. Because of the shutdown it expects second-quarter gold production will be 7,000 oz. less than expected, but it says the loss should be offset later in the year with a change in mining sequence at the Masbate mine’s Colorado pit. As a result, B2Gold has kept its 2013 production guidance at 175,000 to 185,000 oz. gold. Its stock stayed relatively flat at $2.24, as 25.8 million shares changed hands. 

Lake Shore Gold shares doubled to 32¢ over the week, with the miner anticipating strong production and lower cash costs for the second quarter. It says quarterly output could surpass 29,000 oz., with grades averaging above 4 grams per tonne. The producer will release cash costs with its full financials in early August.  

Romarco Minerals climbed 46.8% to 47¢ after providing a permitting update for its Haile gold project in South Carolina. It announced that the U.S. Army Corps of Engineers’ review of the Alternatives Analysis draft is nearing completion and should be available to the public in August. Some key dates in 2014 include: publishing Haile’s draft environmental impact statement (EIS) in March; a draft EIS public hearing in April; and the final EIS in July. It anticipates exiting the June 2013 quarter with US$40 million cash-on-hand.

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