TSX rises, May 25-29: Endeavour Mining, Yamana, RTG Mining, Guyana Goldfields

The S&P/TSX Composite Index rose 1.87% to 15,192.80 during the May 25-29 trading week. The S&P/TSX Global Mining Index fell 2.49% to 86.50 and the S&P/TSX Global Base Metals Index climbed 2.20% to 83.35. Spot gold dropped US$4.00 oz., or 0.23%, to finish at US$1,728.70 per oz. and the S&P/TSX Global Gold Index fell 6.57% to 328.61.

Shares of Endeavour Mining rose 96¢ to $33.18. The company announced on May 28 that its shareholders had voted overwhelmingly in favour of its acquisition of Semafo. The acquisition, first announced in March, sees Endeavour buy Semafo in a $1 billion (US$691 million) deal that will create one of West Africa’s top gold miners. The transaction will create the biggest gold producer in Burkina Faso and Ivory Coast with production estimated at over 1 million oz. per year. The merger will bring together six mines with strong cash flow into one portfolio, the opportunity to optimize assets, and a growth pipeline, the company says. Endeavour shareholders will own about 70% of the combined company, with Semafo shareholders holding the rest.

Yamana Gold’s shares were the second most actively traded of the week and rose 8¢ to $7.45. The company completed the sale to Nomad Royalty (formerly Guerrero Ventures) of a portfolio of royalty interests and the contingent payment to be received upon declaration of commercial production at the Deep Carbonates project at the Gualcamayo gold mine, for $65 million.

News that RTG Mining was granted a mining licence for its Mabilo project in the Philippines sent the junior’s shares up 40% to 11¢. Mabilo is a high-grade gold-copper magnetite skarn deposit in the Camarines Norte province in Eastern Luzon. The shallow and flat-lying deposit is amenable to open-pit mining. Mabilo currently contains an estimated 1.97 million oz. gold at 4.8 grams gold per tonne and 472,000 tonnes of copper-equivalent grading 3.70% copper.

Shares of Guyana Goldfields were up 15¢ to $1.44. The company reported first-quarter production of 28,100 oz. gold at a cash cost before royalties of US$1,084 per oz. gold sold. Cost of sales came in at US$1,376 per oz. and all-in sustaining costs were US$1,352 per ounce. Mining rates averaged 21,200 tonnes per day during the quarter, a 62% decrease compared to the 56,000 tonnes per day recorded in the first quarter of 2019. The decrease was due to mine sequencing, pit constraints imposed by smaller benches and the suspension of waste stripping at Rory’s Knoll pit in February to safely allow ore production from the bottom of the pit. Net earnings came in at $2.3 million, compared to a loss in the year-earlier quarter of $2.3 million, driven by higher margins from higher gold prices, partly offset by higher cost of sales per ounce due to higher fixed cost absorption from lower mined volumes.