TSX posts marginal dip, Aug. 10-14

The surprise devaluation of China’s currency on Aug. 11 pulled many base metal prices lower on fears that demand from the world’s largest buyer of metals would fall. The price of safe-haven gold, by contrast, rose 1.8% to finish at US$1,113.70 per oz., and the S&P/TSX Global Gold Index advanced 7.9% to 130.23. 

Excess supply pushed oil prices lower. West Texas Intermediate crude finished at US$42.16 per barrel, after dipping below the US$42-per-barrel mark earlier. Falling energy shares on the back of sliding U.S. oil prices dragged the benchmark S&P/TSX Composite Index down 0.2% to 14,277.88, while the S&P/TSX Capped Diversified Metals & Mining Index fell 4.4% to 487.54. 

Uncertainty about slowing economic growth in China and whether Beijing’s mini-devaluation would delay higher U.S. interest rates kicked off a gold rally, lifting the shares of many companies producing the precious metal. Agnico Eagle Mines jumped $3.89 to $30.99 per share, Detour Gold climbed $1.70 to $14.02 per share and Barrick Gold increased $1.25 to $10.07 per share, all on no company-related news. 

Franco-Nevada posted the largest gain, jumping $6.97 to $57.66 per share. The royalty company reported second-quarter financial results and a monthly dividend of 21¢ per share. In the second quarter, Franco-Nevada realized 83,040 equivalent oz. gold from its mineral assets and US$10.3 million in revenue from its oil and gas assets. Net income and adjusted net income were US$21.6 million, or 14¢ per share, and US$22.9 million, or 15¢ per share. Cash from operating activities before changes to working capital reached US$78 million. President and CEO David Harquail noted the company’s balance remains liquid with no debt. “We see downturns as an opportunity for even better investments,” Harquail said. “There are many active opportunities, and Franco-Nevada has increased its credit facility to $750 million to be better positioned to act on the right ones.”

Positive court rulings in Greece lifted the fortunes of Eldorado Gold, whose shares rose $1.07 to $5.13. The company reported two court decisions in favour of its Greek subsidiary. The court rulings — related to forestry land and site-clearing rights at the company’s Skouries gold-copper project in northern Greece — will accelerate construction, the company’s CEO Paul Wright stated in a press release. 

Shares of China Gold International Resources rose 39¢ to $2.05. The company reported consolidated revenue of US$161 million for the first half — up from US$85.2 million during the first half of 2014 — while net income climbed to US$16.8 million, up from US$9.7 million in the first half of 2014. The company operates the CSH gold mine in Inner Mongolia, and the Jiama copper-polymetallic mine in Tibet.