TSX rises while gold falls, July 9-13

Canada’s benchmark index rose 1.15% to 16,561.12 on a down trading week. The S&P/TSX Global Mining Index fell 1.6% to 73.19 and the S&P/TSX Global Gold Index fell 2.76% to 188.92. The price of gold fell 1.07% to US$1,241.

Shares of Avesoro Resources rose 97¢ to $5.32. The company recently finished infill drilling 16,200 metres across 75 holes at its Ndablama gold deposit, 45 km northeast of its New Liberty gold mine in Liberia. It intends to upgrade inferred resources at Ndablama to the measured or indicated categories so it can start mine planning.

Currently the project contains 5.6 million indicated tonnes grading 1.9 grams gold per tonne for 349,000 oz. gold and 6.9 million inferred tonnes at 2.1 grams gold for 464,000 oz. gold. The company is now evaluating the feasibility of trucking material to the New Liberty processing plant.

Avesoro will spend US$25 million in 2018 drilling 171,000 metres as it tries to convert 1 million oz. gold from resources to reserves. So far it’s drilled 63,100 metres in Burkina Faso and 28,550 metres in Liberia.

Shares of Prophecy Development fell another 15.9% to $1.85, continuing a slow and gradual decline. The company has proposed spinning off a vanadium royalty company that would buy a portion of the vanadium that Prophecy wants to produce at its Gibellini project in Nevada at a discounted price. The royalty company would make a cash prepayment to Prophecy in exchange for the discount, covering Gibellini’s US$116.8 million initial capital expenditure.

Prophecy completed a preliminary economic assessment for Gibellini in late May. The project has a US$338.3 million after-tax net present value at a 7% discount rate and a 50.8% after-tax internal rate of return.  It would produce 9.65 million lb. vanadium oxide per year over 13.5 years, with a 1.72 years payback period.

Shares of Pretium Resources rose 60¢ to $11.22 on news that it produced 111,340 oz. gold in the year’s second quarter and had achieved steady-state production at its Brucejack gold mine in northwestern British Columbia. The company milled 2,604 tonnes per day at 14.9 grams gold, averaging 97.7% recoveries. In 2016 the company estimated it would process 2,700 tonnes per day at 16.1 grams gold during the mine’s first 10 years, with grade dropping to 14.1 grams gold over the mine’s life.

Pretium shares tanked in late January after announcing it had produced 12,000 fewer oz. gold in the fourth quarter of 2017 compared to the prior quarter.

The company expects to produce 200,000 to 220,000 oz. gold at Brucejack in the second half of 2018, with all-in sustaining costs stabilizing at between US$710 and US$770.