U.S. equity indexes pulled lower, March 23-27

As Saudi Arabia took military action against Houthi rebels in Yemen, U.S. equity indexes dropped and gold rose. The Dow Jones Industrial Average lost 2.3%, falling to 17,712.66, and the S&P 500 Index declined 2.2% to 2,061.02. Spot gold climbed by US$16 per oz., or 1.4%, to end the week at US$1,198 per oz., and the Philadelphia Gold & Silver Index dropped 2.2% to 67.73. Domestic indicators were mixed, with the U.S. Department of Commerce reporting new home sales reached a seven-year high in February, while real fourth-quarter gross domestic product rose 2.2% over the year — shy of its 2.4% estimate — and U.S. consumer sentiment fell month-over-month in March.

Shares of Revett Mining jumped 17.7% to US47¢ per share on news that Hecla Mining plans to acquire the company in an all-stock deal worth $20 million. Under the proposed merger, each common share of Revett will be exchanged for 0.1622 of a Hecla share. Based on Hecla’s March 25 closing price of US$3.23 per share, the offer is a 32% premium to Revett’s 20-day, volume-weighted average price. Hecla intends to advance permitting at Revett’s Rock Creek project in northwestern Montana, 80 km north of Hecla’s Lucky Friday mine in Idaho. Rock Creek has an inferred resource of 229 million oz. silver and 2 billion lb. copper. The U.S. Forest Service says a supplemental environmental impact statement will be issued later this year for public comment. 

An agreement to sell its chromite assets in Ontario’s Ring of Fire mineral belt to Toronto-based junior Noront Resources for US$20 million, helped lift the shares of Cliffs Natural Resources by US43¢ to US$4.73 per share. Cliffs says the sale shows that it is executing on its strategy of divesting non-core assets and focusing on being “the major supplier” of iron ore pellets to the North American steel industry. Cliffs paid US$240 million for the land package in 2009, but suspended the project in 2013.

Gold Resource climbed 12.5%, or US37¢, to US$3.32 per share on no news. The company has operations in Oaxaca, Mexico, and exploration in Nevada, and has returned over US$102 million to shareholders in monthly dividends since July 2010.