TSX drops during the Dec. 12-16 trading week

Stocks fell during the Dec. 12-16 trading period as the U.S. Federal Reserve increased interest rates again to fight high inflation and retail sales figures disappointed analysts. Markets were volatile. 

The S&P/TSX Composite Index shed 503.79 points or 2.5% to 19,443.28. The S&P/TSX Global Mining Index decreased 2.7 points or 2.4% to 108.3, and the S&P/TSX Global Base Metals Index lost 6.48 points or 3.4% to 182.55. The S&P/TSX Global Gold Index fell 3.18 points or 1.1% to 260.39, and spot gold ended the week at US$3.60 per oz. lower, or 0.2%, at US$1,792.55 per ounce.

First Quantum Minerals fell 16.5% during the week after it and the government of Panama failed to sign a contract for the Cobre Panama copper mine. After the Dec. 15 deadline passed, the government of President Laurentino Cortizo said it was suspending the mine’s operating licence. 

The Central American country and the Vancouver-based miner had agreed in January to a US$375 million royalty plan and improvements for workers, the environment and community around the site about 120 km west of Panama City.

Further negotiations failed because legal protections on termination, stability and transition arrangements could not be agreed, First Quantum said.  

The government said First Quantum made unreasonable demands that often moved the sides farther apart instead of closer together.  

The January agreement also included the miner paying the government 12% to 16% of its gross profit, which would replace a 2% revenue royalty, and to start paying a 25% corporation tax that hadn’t applied while the miner recovered its investment costs.  

Royalty and streaming company Franco-Nevada suffered from ties to the Cobre Panama mine, as well. Its shares lost $10.85 over the week to $181.38. 

The company also earns a stream of gold and silver production from the Antapaccay mine run by Glencore in Peru. The South American country has been rocked by protests, strikes and road blockades after President Pedro Castillo, a former farmer popular in the Andean mining areas, was voted out of power on Dec. 7 for alleged corruption and trying to suspend Congress. 

The surge in unrest has left at least 20 people dead and threatened investor confidence in the world’s second-largest copper producer. New President Dina Boluarte is Peru’s fifth leader in six years. Rural protesters have for months been blockading some mining operations, such as MMG’s Las Bambas. 

Sulliden Mining Capital dropped 12.5% to 4¢ after the company reported disappointing drill results from its East-Sullivan gold project at a past-producing mine near Val-d’Or, Que. 

“The results show a sub-economical combination of grade and true width in the context of an underground target,” the company said in quarterly results on Dec. 15. “Another barren shear zone of the same general attitude was also discovered above the main shear zone.”