TSX declines, July 28-Aug.1

Canada’s main stock index tumbled during the trading week, posting its biggest drop since early May.

Investors worried that the U.S. Federal Reserve would hike up interest rates following signs of economic growth, despite a recent U.S. jobs report showing the unemployment rate edged up 0.1 of a point to 6.2% in July. 

Global markets also took a hit as Argentina again defaulted on its debt, and war in Ukraine and the Middle East continued.

The spot price for gold tumbled US$14.10 per oz. to US$1,294.20, while the S&P/TSX Global Gold Index gave back 2 points to close at 198.52. The diversified miners followed suit, with the S&P/TSX Capped Diversified Metals & Mining Index dropping nearly 5 points to 919.27.

Harte Gold jumped nearly 35% to 33¢ after raising gross proceeds of $750,000 in a non-brokered private placement, where it issued 3.33 million units for 22.5¢ apiece. Each unit consists of one share and a half warrant, with a full warrant exercisable at 30¢ within 18 months of closing. Harte Gold will use the proceeds to fund current exploration as well as development work on its 100% owned Sugar Zone high-grade gold property in Ontario. Sugar Zone sits 60 km east of the Hemlo gold camp.

Junior developer Seabridge Gold was the week’s value winner, adding $1.22 per share to $10.19. The boost came after the B.C. government has given the company’s KSM gold–copper project an environmental approval, after more than six years of environmental and economic studies. Seabridge expects to receive a federal approval for its flagship project in the coming months. 

Senior gold miner Agnico Eagle Mines was the biggest value loser, dropping $4.08 a share to $41.15, despite reporting decent second-quarter results. Its adjusted second-quarter profit was US28¢ per share, in-line with analysts’ expectations. Agnico produced 45% more gold at significantly lower cash costs compared to a year ago. Second-quarter production was 326,059 oz. gold at total cash costs of US$626 per oz.

Yamana Gold was the most actively traded stock after revealing its adjusted second-quarter earnings of US5¢ per share beat analysts’ average estimates of US3¢ per share, but came in below the US7¢ per share earned in the same period last year. The decline in profit resulted from lower realized metals prices and higher costs of sales. Quarterly production was 331,765 equivalent oz. gold, up 12% from the year ago period. By-product cash costs also grew 10% over the same period to US$523 per equivalent oz. gold, partially due to lower by-product revenues. Yamana advanced 48¢ to end the week at $9.47, on 21.8 million shares traded.

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