Canada’s benchmark index posts slight increase, Feb. 19-23

The S&P/TSX Composite Index rose 1.20% to 15,638.45. The S&P/TSX Global Mining Index fell 0.56% to 72.96. A rising U.S. dollar put pressure on the gold price, which dropped US$18.30 per oz., or 1.36%, to finish at US$1,328.20 per ounce. The S&P/TSX Global Gold Index declined 2.57% to 182.59.

Shares of Kirkland Lake Gold jumped $1.08 to $19.75 on the back of solid 2017 production and financial results. The company produced 596,405 oz. — a 90% increase over 2016. Operating cash costs averaged US$481 per oz. sold, in a 16% improvement from 2016, while all-in-sustaining costs of US$812 per oz. were a 13% improvement year-on-year. Net earnings came in at US$132.4 million, or 64¢ per basic share, up from US$42.1 million (35¢ per share) in 2016. Adjusted net earnings from continuing operations clocked in at US$149.1 million (72¢ per share), up 120% year-on-year. Cash flow from operating activities totalled US$309.8 million, in a 66% year-on-year increase. Kirkland Lake also noted that it spent US$48.4 million on exploration and evaluation last year, up from US$15.8 million in 2016.

First Quantum Minerals rose 29¢ to $21.10 per share. The company is launching a US$1.5-billion offering of senior notes, with one tranche due in 2024 and another tranche in 2026. The company intends to use the proceeds from selling the notes to repay amounts drawn and outstanding under a revolving-credit facility it entered into on Oct. 19, 2017.

Strong financial results lifted shares of OceanaGold 25¢ to $3.43. The company reported record net profit in 2017 of US$172 million on record revenue of US$724 million. Net profit was 26% higher than 2016 (despite a non-cash impairment of US$18 million taken in the second quarter, related to OceanaGold’s El Salvador business), and revenue was 15% higher year-on-year. The company also reported that it had lowered its net debt by US$88 million in the fourth quarter, with debt repayments of US$78 million. The company increased its cash balance from US$61 million to US$73 million in the final three months of 2017, while lowering its revolving credit facility from US$273 million to US$200 million.

Nautilus Minerals surged 56% to 34¢ per share on no news. On Feb. 27, the company announced results of a preliminary economic assessment of its Solwara 1 deep-sea mining project in the Bismarck Sea of Papua New Guinea. The PEA models first production starting in the third quarter of 2019 and a 15-month ramp up to steady production of 3,200 tonnes per month. The PEA outlined steady production per quarter of 20,000 tonnes copper and 29,000 oz. gold. “Expected steady-state C1 operating costs of US80¢ per lb. copper sit comfortably in the lower half of the first quartile of the production curve, and highlight the potentially seriously disruptive nature of seafloor mining to the world’s mining industry,” CEO Mike Johnston said in a press release.