Wall Street dips, May 15-19

The three major U.S. stock indexes fell during the third week of May. The S&P 500 Index slipped 0.38% to 2,381.73 and the Dow Jones Industrial Average dropped 0.44% to 20,804.84. The Nasdaq retreated 0.6% to 6,083.70. Spot gold gained 2%, or US$27.90, to finish at US$1,227.70 per oz., while U.S. crude oil futures rose 5.2% to US$50.33 per barrel.

Iamgold gained 6.2% to close at US$4.46 per share after promising drill results. On May 15, Iamgold provided an update from its 2017 infill drilling program at the Saramacca project, near its Rosebel gold mine in Suriname. The company completed the current phase of the drill program, consisting of 113 diamond drill holes totalling 19,600 metres. Iamgold received assay results from 78 holes, with the other assays expected in June. Results to date show high grades over wide intervals, with recent highlights including 43.5 metres grading 12.26 grams gold per tonne and 76.6 metres of 7.74 grams gold. Iamgold expects to incorporate the results into an initial resource estimate, targeted for completion in the third quarter of 2017.

Sibanye Gold was the biggest percentage loser, sinking 36.7% to US$5.51 per share. On May 18, the South African gold producer finalized the terms of its US$1.1 billion renounceable rights offer to qualifying shareholders. Sibanye will use the proceeds from the rights offer to repay part of the US$2.7-billion bridge loan that it used to complete the recent US$2.2-billion acquisition of Stillwater Mining, the sole palladium and platinum producer in the United States. The rights offer should close on June 9, 2017.

Eldorado Gold shares fell 5.5% to US$3.46, after revealing a $590-million acquisition of Integra Gold. Integra shareholders could receive either 0.24250 of an Eldorado share, $1.21250 in cash or 0.18188 of an Eldorado share and $0.30313 in cash. Of the three options, the first two are subject to pro ration. The offer is a 52% premium to Integra’s May 12 closing price and a 46% premium to the 20-day, volume-weighted average prices of both companies. Eldorado expects to issue a maximum of 77 million shares and $129 million in cash for all the Integra shares it doesn’t already own. Eldorado owns 13% of Integra, whose main asset is the Lamaque gold project near Val-d’Or, Quebec.