TSX down, May 27-31: Agnico, Newmont Goldcorp, Moneta Porcupine

The U.S.–China trade dispute continued to rattle investor sentiment, with the S&P/TSX Composite Index down 1.19% to 16,037.50. The bleak trade outlook also put pressure on base metals while lifting gold. The S&P/TSX Global Base Metals Index fell 1.54% to 87.51, while spot gold rose 1.58% to US$1,304.90 per oz., and the S&P/TSX Global Gold Index increased 5.98% to 190.45.

The start of commercial production at Agnico Eagle Mines’ Meliadine mine near Rankin Inlet in Nunavut sent the gold miner’s shares up $3.73 to $58.95. The mine achieved commercial production ahead of schedule and below the initial capital budget estimate in 2017 of US$900 million. Meliadine could produce 230,000 oz. gold this year at total cash costs of US$612 per ounce. The company forecasts total 2019 production of 1.75 million oz., with its Amaruq deposit on schedule to reach commercial production in the third quarter. Agnico acquired Meliadine in July 2010 and owns 100% of the 1,113.6 sq. km property. The board approved mine construction in February 2017.

Shares of Newmont Goldcorp finished $1.80 per share higher at $44.64. The company announced first-quarter results, delivering net income from continuing operations of US$113 million, or US21¢ per diluted share, earnings before interest, tax, depreciation and amortization of US$687 million, and free cash flow of US$349 million. The company produced 1.23 million oz. gold in the three months ended March 31 at gold costs attributable to sales of US$701 per oz., and all-in sustaining costs of US$907 per ounce. Newmont Goldcorp ended the quarter with net debt of US$0.8 billion, and US$3.5-billion cash-on-hand. The company expects attributable gold production this year of 5.2 million oz., and 4.9 million oz. in 2020.

Results from the first diamond drill hole of its early 2019 drill program at its South West deposit, 110 km east of Timmins, Ont., sent Moneta Porcupine’s shares up 30% to 13¢ apiece. Drill hole 19-116 on the West Block target extended mineralization 500 metres west of the Southwest deposit, and intersected four mineralized veins outside of the 2019 mineral resource estimate. The hole returned 6 metres grading 12.22 grams gold per tonne, including 3 metres of 19.93 grams gold, including 1 metre of 27.50 grams gold starting from 274 metres downhole. The West Block area occurs in the same geological setting as the South West deposit, but was not included in the recent resource update for South West, which contains 2 million indicated tonnes grading 4.63 grams gold per tonne for 298,800 oz. gold, and 5.6 million inferred tonnes of 4.21 grams gold for 755,800 oz. gold. The company’s fully funded program at South West, part of the Golden Highway project, consists of up to 10,000 metres to extend the Gap veins and test the continuity of mineralized structures in the West Block area.