TSX slips, Feb. 17-21: Newmont, Eldorado, Wheaton Precious Metals, Pan American, Teck

The blockade of rail traffic across Canada due to a disputed gas pipeline and fears about the impact the coronavirus is having on the global economy, sent the S&P/TSX Composite Index down 0.03% to 17,843.50. Uncertainty sent the price of gold up US$59.40 per oz. or 3.75%, to finish the trading week at US$1,643.00 per oz., and the S&P/TSX Global Gold Index surged 8.69% to 282.93. The S&P/TSX Global Base Metals Index fell 2.92% to 97.31, while the S&P/TSX Global Mining Index advanced 2.89% to 81.78.

Shares of Newmont Mining climbed $7.04 to $65.37 on the back of strong production and financial results for 2019. The company produced 6.3 million attributable oz. gold, a 23% year-on-year increase, at all-in sustaining costs of US$966 per oz. Newmont generated US$1.4 billion in free cash flow, posted net income of US$2.9 billion or US$3.91 per diluted share and adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of US$3.7 billion, a 45% year-on-year increase. The company expects to produce 6.4 million oz. gold in 2020 at AISCs of US$975 per ounce. It also forecasts realizing US$1.4 billion in cash proceeds in the first quarter of the year through divestitures.

Eldorado Gold’s shares jumped $4.27 to $13.10. The company produced 395,331 oz. gold in 2019, up from 349,147 oz. gold in 2018, at AISCs of US$1,034 per oz. gold sold, up from US$994 per oz. in 2018.
For 2020 Eldorado forecasts production of 520,000 to 550,000 oz. gold at AISCs of US$850-950 per oz. gold sold. The company also announced a 15-year mine life for its Kisladag mine in Turkey, through 2034, based on long-cycle heap leach testwork and the replacement of the tertiary crushing circuit with a high-pressure grinding roll (HPGR) circuit.

Shares of Wheaton Precious Metals rose $3.77 to $43.52. The metals streaming company reported record annual gold production and sales for 2019 of 406,604 oz. gold, 22,544 oz. silver and 21,993 oz. palladium for 706,900 gold-equivalent ounces. It forecasts 2020 production of 390,000-410,000 oz. gold, 22,000-23,500 oz. silver and 23,000-24,500 oz. palladium, or 685,000-725,000 gold-equivalent ounces.

Pan American Silver’s shares advanced $3.66 to $33.35. The company reported net earnings of US$111.2 million, or 55¢ per share, in 2019. Net earnings were impacted in the fourth quarter by a US$40 million impairment charge related to Pan American Silver’s Manantial Espejo mine in Argentina, which was partially offset by US$33.7 million in investment income, largely related to its 17% stake in New Pacific Metals. Full-year production reached 25.9 million oz. silver at AISCs of US410.46 per silver oz. sold and 559,200 oz. gold at AISCs of US$948 per oz. gold sold.

Shares of Teck Resources were down $3.38 to $14.45. The company reported unaudited adjusted profit attributable to shareholders of $1.6 billion or $2.77 per share, down from $2.4 billion or $4.13 per share in 2018.”