TSX edges lower, Feb. 16-20

Greece may have reached a deal in principle with euro finance ministers to extend its financial bailout by four months, but concern in the energy sector about the impact of low oil prices drove the S&P/TSX Composite Index down 0.6% to 15,172.24 in the holiday-shortened trading week. Spot gold ended lower at US$1,203.90 per oz., a 1.96% decline. The S&P/TSX Global Gold Index fell 2.5% and closed at 175.80 points, while the S&P/TSX Capped Diversified Metals & Mining Index eked out a 0.9% gain, climbing to 695.74.

Shares of Barrick Gold advanced $1.05 to $16.17 — the biggest weekly gain — after management announced that it is seeking “a return to the lean, decentralized operating model that underpinned Barrick’s early success.” The company plans to reduce net debt by at least US$3 billion by the end of 2015, and look for buyers for its Porgera mine in Papua New Guinea and its Cowal mine in Australia. The company also stated that it would reduce the size of its head office from 260 positions in 2014 to 140 positions this year, and “defer, cancel or sell projects” that don’t meet a 15% hurdle rate. Last year, Barrick produced 6.25 million oz. gold at all-in sustaining costs of US$864 per oz., generating US$2.3 billion in operating cash flow. Its 2015 guidance: 6.2 million to 6.6 million oz. gold at all-in sustaining costs (AISC) of US$860 to US$895 per oz. The company expects to generate positive free cash flow this year at current prices. In the fourth quarter, Barrick’s adjusted earnings were US$174 million, or US15¢ per share. The company reported a quarterly net loss of US$2.9 billion, or US$2.45 per share, reflecting the impact of a US$2.8-billion after-tax impairment charge, primarily related to its Lumwana mine in Zambia and its Cerro Casale project in Chile.

Eldorado Gold posted a 33¢ gain to finish the week at $6.48 per share. It reported gold production in 2014 reached a record 789,224 oz. at average cash costs of US$500 per oz. and AISC of US$779 per oz. Adjusted net earnings for the year reached US$138.7 million, or US19¢ per share, compared to US$192.9 million, or US27¢ per share in 2013. Eldorado ended the year with liquidity of US$876.3 million, including US$501.3 million in cash and equivalents and term deposits, and US$375 million in unused lines of credit. It also said it would spend US$200 million on development capital at its Skouries project in Greece. Some Greeks have protested the project, saying it will harm tourism.  

Argex Titanium jumped 32.5% to 53¢ per share after it received completed technical due diligence reports associated with financing its first industrial-scale titanium dioxide (TiO2) plant to be built in Valleyfield, Que. The reports were prepared by independent industry experts engaged by the company’s debt and leading equity financing sponsors. Argex says with this stage of the financing complete, it will focus on the remaining steps to complete the financing.