US markets advance, May 25-May 29: Vale, Cleveland Cliffs, Fortuna Silver, Barrick

The Dow Jones Industrial Average rose 3.75% to 25,383.11, and the S&P 500 increased 3.01% to 3,044.31. Spot gold fell US$4.00 per oz., or 0.23%, to finish the trading week at US$1,728.70 per ounce.

Vale’s shares climbed US78¢ (8.7%) to US$9.76. A judge in the Brazilian state of Minas Gerais partially granted an injunction sought by prosecutors and ordered the company to set aside 7.9 billion reais (US$1.5 billion) to pay potential fines related to the tailings dam collapse that killed 270 people last year. The figure adds to the 1 billion reais (US$260 million at the time) in frozen funds a federal court ordered Vale to pay affected communities shortly after the deadly incident at the Feijao iron ore mine in Brumadinho. About $48 million reais (US$10.4 million) were released back to the company in March to fund a probe into the causes of the dam collapse.

Shares of Cleveland Cliffs rose US54¢ (11.5%) to US$5.22. The company said its wholly-owned subsidiary, AK Steel, is increasing spot market base metal prices for all carbon flat-rolled steel products by a minimum of US$40 per ton, with new orders in North America. The company is among the largest vertically integrated producers of differentiated iron ore and steel in North America.

Fortuna Silver Mines advanced 6.9% to US$4.49 on news that production at its San Jose silver mine in Mexico officially resumed at nameplate capacity of 3,000 tonnes per day on May 26 after being suspended due to the coronavirus pandemic. In other news, the company closed a US$69 million bought deal equity financing that included a full exercise of the over-allotment option. Fortuna Silver issued a total of 23 million common shares at a price of US$3.00 per share. The proceeds will be used primarily to fund the remaining construction and preproduction related expenditures at its Lindero gold project in Argentina.

Barrick Gold fell US$2.32 to US$24 per share. The company announced on May 25 that it had settled the majority of the North Mara legacy land claims and paid the first tranche of the US$300 million settlement it agreed to in January with the Tanzanian government to resolve the disputes it inherited from its now defunct subsidiary, Acacia Mining. Under the framework of its agreement with the government, Barrick resumed the shipping of about 1,600 containers of concentrate stockpiled from Bulyanhulu and Buzwagi in April and the first US$100 million from the sale had been paid to the government. The initial payment will be followed by five annual payments of US$40 million each. At the same time, about 90% of the outstanding land claims at North Mara have been settled, Barrick reported, and payments have begun.