US markets post significant gains, Nov. 26-30

U.S. markets surged in the trading week with a revised North American trade pact. The U.S.–Mexico–Canada (USMCA) agreement, signed on Nov. 30, replaces the 24-year-old North American Free Trade Agreement. The Dow Jones Industrial Average jumped 5.16% to 25,538.46 and the S&P 500 Index rose 4.85% to finish at 2,760.17.

An upward guidance revision for its Fosterville mine in Australia propelled Kirkland Lake Gold’s shares to US$20.78, in an increase of US$1.23, or 6.3%. Kirkland Lake Gold says it expects production at Fosterville in 2018 will exceed 330,000 oz. gold, compared to its previous guidance of 300,000 to 310,000 oz. gold. Higher-than-planned grades are boosting production in 2018, the company said, and could impact both 2019 and 2020. “Strong results at Fosterville during fourth-quarter 2018, as well as a solid performance from our Canadian operations to date in the quarter, are positioning us to end 2018 with total production for the full year exceeding our current target range of 655,000 to 670,000 ounces,” Tony Makuch, Kirkland Lake Gold’s president and CEO, said on Nov. 30.

Shares of Cleveland-Cliffs were up 50¢ per share, or 5.7% to US$9.28, on news of a share-repurchase program. Under the program, the company can buy up to US$200-million worth of shares via acquisitions in the open market, or privately negotiated transactions — including through accelerated share repurchases — until Dec. 31, 2019. CEO Lourenco Goncalves noted that the “disconnect” between the company’s “strong profitability and the current volatility in the capital markets” has created “a highly accretive use of capital by buying back our own common shares.”

Rio Tinto’s shares dropped US75¢ to US$46.76. The company approved a US$2.6-billion investment in its Koodaideri iron ore mine in Western Australia, 35 km northwest of the company’s Yandicoogina mine, and 110 km from Newman, a town in the Pilbara region. Construction will start next year, with first production slated for late 2021. Once finished, the mine will have an annual capacity of 43 million tonnes, underpinning production of Pilbara Blend, Rio Tinto’s flagship iron ore product. Koodaideri will “deliver a new production hub for Rio Tinto’s world-class iron ore business,” the company noted.