US markets rise, March 5-9

U.S. markets moved higher as U.S. President Donald Trump accepted an invitation to meet with North Korean strongman Kim Jong-un, and signed into law tariffs on imports of steel (25%) and aluminum (10%). (Canada and Mexico are exempt from the tariffs.) A strong jobs report also confirmed that unemployment was unchanged at 4.1%, while the economy created 313,000 new jobs in February, the biggest monthly gain since mid-2016. The Dow Jones Industrial Average rose 3.25% to 25,335.74 and the S&P 500 Index jumped 3.54% to 2,786.57. Gold finished at US$1,323.10 per ounce, up just 0.04%.

Franco-Nevada’s shares were down US$2.39 to US$68.17, despite strong financial results. The company reported 2017 revenue of US$675 million — a new record — and a 10.6% increase year-on-year, while net income reached a record US$194.7 million, or US$1.06 per share. At year-end, Franco-Nevada had US$511.1 million in cash and equivalents, and no debt.

Shares of Cleveland-Cliffs were down US52¢ to US$7.43. CEO Lourenco Goncalves applauded President Trump’s move to impose a 25% tariff on steel imports and “taking real action” to “punish the perpetrators and enablers of unfairly traded steel.” Goncalves said the tariffs “will support our ability to continue to produce iron ore pellets and steel in our country, enhancing a vibrant manufacturing economy and our national security.”

Tahoe Resources’ shares were down 4.7% to US$4.68. The company announced on March 8 that Guatemala’s Constitutional Court has requested more information in the legal case against its Escobal mine licence. The silver mine was suspended in mid-2017 over questions about the licence, which was granted by the Ministry of Energy and Mines (MEM). The Constitutional Court has requested original copies of documents submitted last July, and other information, including an anthropological study showing populations of indigenous people in the area; a third-party review of the environmental impact study and mitigation measures; and a third-party review of MEM’s consultation that led to the first mining licence in 2013. Tahoe has ended contracts for half of its local employees, and said for every month of delay, US$4 million in taxes and royalties are not being paid to the government and local communities.