TSX posts strong gain, April 11-15

The Bank of Canada announced mid-week that it would keep its overnight interest rate at half a percent, and projected real gross domestic product growth this year would be 1.7%, rising to 2.3% in 2017. Encouraging trade data from China — March exports grew for the first time in nine months — cheered investors. Canada’s main stock index rose 1.8% to 13,637.20, and the S&P/TSX Capped Diversified Metals & Mining Index rose 10.4% to 452.89. The S&P/TSX Global Mining Index was up 7.8% at 54.70, and the S&P/TSX Global Gold Index inched 0.02% higher to 201.21. The New York spot gold price slipped US$4.30 per oz. to finish at US$1,234.10.

Endeavour Mining is going ahead with  building its 90%-owned Houndé project in Burkina Faso, which lifted the company’s shares $1.24 to $14.04 apiece. Endeavour estimates the mine will increase the group’s total production to 900,000 oz. a year and lower average all-in sustaining costs (AISCs) to below US$800 per oz. by 2018. Houndé could produce 190,000 oz. a year over a 10-year mine life at AISCs of US$709 per oz. based on current reserves. The project would be an open-pit mine with a $328-million initial capital cost, inclusive of the $47 million for the owner-mining fleet. The capex is fully funded from existing capital. Endeavour says it would take 18 months to build the mine, and hopes to pour first gold in the fourth quarter of 2017. Once in production, Houndé will be Endeavour’s flagship low-cost mine and rank among the top-tier, cash-generating mines in West Africa.

Shares of First Majestic Silver rose $1.63 to $10.55 on news of record production in the first quarter of 2016. The company’s six silver mines turned out 5.1 million equivalent oz. silver, or 30% more than in the first quarter of 2015. Production consisted of 3.1 million oz. silver, 16,870 oz. gold, 8.6 million lb. lead and 4 million lb. zinc.

Richmont Mines posted solid first-quarter results that sent the company’s shares up $1.16 to $9.41 apiece. Its Island gold mine, 83 km northeast of Wawa, Ont., posted a 147% increase in production year-on-year to 26,589 oz. gold, and an 87% increase over the previous quarter. Cash costs of $674 per oz. (US$491 per oz.) were 52% lower year-on-year and 34% lower than the prior quarter. Richmont attributed the strong results to higher-than-expected reconciled grades of 11.31 grams gold per tonne milled and record mill throughput of 834 tonnes per day. Company-wide, Richmont produced 32,369 oz. gold, up 25% year-on-year and 45% higher than the quarter before. Cash costs company-wide were $806 per oz. (US$587 per oz.) — an 18% decrease year-on-year and 22% decrease from the previous quarter.