Toronto Stock Exchange, July 29-Aug. 2

The S&P/TSX Composite Index was off 19 points to 12,603.25 for the period, as precious metal prices slumped and job numbers out of the U.S. disappointed market watchers. 

Miners fell in step with the metal prices, as the S&P/TSX Global Gold Index shed 12 points to 176.08 points, while the price for the metal itself was off US$31 to US$1,302.40 per oz. 

The S&P/TSX Capped Diversified Metals & Mining Index didn’t fare any better despite better base metal prices. The index was off 23 points to 719.31 despite a resilient copper price, which climbed 17¢ to finish at US$3.17 per lb. 

It was another bad week for Barrick Gold investors: the company took a US$8.7-billion writedown and cut its dividend. Its flagship project Pascua-Lama accounted for US$5.1 billion of the writedown, its global copper unit accounted for another US$1 billion and its Australia-Pacific assets held US$1.3 billion. The rest of the writedown was attributed to African Barrick’s Tanzanian assets and the Jabal Sayid copper project in Saudi Arabia. The big writedowns contributed to a quarterly loss of US$8.6 billion, or $8.55 per share, compared to last year’s earnings of US$787 million, or 79¢ per share. The news wasn’t all bad, however, as the company produced 1.8 million oz. gold for the quarter at all-in costs of US$919 per oz., which beat expectations. Shares fell 91¢ to $17.37.

Kinross Gold made a more drastic move, suspendeding its dividend altogether and taking another impairment charge on its Tasiast project, this time to the tune of US$2.3 billion. The company’s stock was off 30¢ to $5.32 per share. 

Klondex Mines offered gold investors some good news, as the company reached a 52-week high. Its stock climbed 24% to $1.57 after announcing its progress towards  becoming a producer at its Fire Creek project in Nevada. Klondex reported that it mined 1,302 tonnes of ore in June from its underground development program, which followed word that it had reached an agreement with Newmont Mining that would see ore from Fire Creek processed by Newmont. Klondex also secured $2.4 million in bridge loans to support development at Fire Creek, where initial production from bulk sampling is due to start later this year.

Energizer Resources shares jumped 86% to 21¢ after the reporting of metallurgical results from its Molo graphite deposit in Madagascar. The company achieved greater than 99.9% graphitic carbon from a finished concentrate at the deposit. A preliminary test was done to enhance the operating and capital costs reported in its economic study from January. The concentrate was made in a single cleaner-flotation test without optimized conditions, and conventional leach technology was used for purification. 

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