TSX edges higher, July 8-12: Glencore-Katanga, Avesoro, New Gold, Uranium

The S&P/TSX Composite Index ended the trading week up 14.83 points, or 0.09%. The S&P/TSX Global Mining Index was up 0.68 point, or 0.87%, to 78.68, while the S&P/TSX Global Base Metals Index slipped 1.29 points to close at 109.53. Spot gold finished at US$1,407.60 per oz., up US$18.95 per oz., or 1.36% from the week before.

Glencore subsidiary Katanga Mining’s shares ended the week at 48¢ apiece, up 39.7%, which was the top weekly percentage gain for the sector. The market applauded news on July 4 that government armed forces arrived in response to a growing presence of illegal artisanal miners on the company’s 75%-owned Kamoto copper mine complex in the Democratic Republic of the Congo’s Kolwezi region. The operation includes the Kamoto concentrator, Luilu metallurgical plant, Kamoto underground mine and two oxide open-pit resources.

Late last month the company reported that at least 19 illegal artisanal miners were killed when two galleries caved in on-site. The company added that 2,000 illegal artisanal miners were entering its concession each day.

Junior gold miner Avesoro Resources saw its shares end the week on a high note, up 33.6% to close at $1.59 each. The rise followed Avesoro’s mid-week release of quarterly production results that outlined 34,338 oz. gold produced at the company’s two gold mines: New Liberty in Liberia, and Youga in Burkina Faso. The company expects gold production will increase in the second half of the year, and has a production guidance of 180,000 to 200,000 oz. gold for 2019.

New Gold shares saw a 31.4% appreciation, as the company announced results from its Rainy River and New Afton mines in Canada. The assets yielded 85,216 oz. gold, 151,305 oz. silver and 21.6 million lb. copper in the quarter. New Gold says it is on track to hit its 2019 production guidance of 465,000 to 520,000 equivalent oz. gold, including 300,000 to 335,000 oz. gold.

The company also operates the Cerro San Pedro gold mine in San Luis Potosi, Mexico, which transitioned to residual leaching in 2016. Revenue generated from Cerro San Pedro is excluded from the guidance, with any proceeds to support closure and reclamation efforts at the site.

U.S.-focused uranium juniors Energy Fuels and Ur-Energy dropped 36.6% and 35.2% to close the period at $2.51 and 79¢ per share. The sell-off came on July 12, the same day that U.S. President Donald Trump announced his administration would not move towards restricting uranium imports, which would have been a boon for the juniors’ U.S. uranium assets. The two companies had requested the U.S. government study the issue and impose import restrictions to shore up domestic production capacity on national security grounds.