TSX down, Oct. 12-16

The S&P/TSX Composite Index fell 0.75% to 16,438.75 during the Oct. 12-16 trading week. The S&P/TSX Global Mining Index declined by 1.61% to 96.52, and the S&P/TSX Global Base Metals Index climbed 0.78% to 103.67. Spot gold dropped US$30.90 per oz., or 1.60%, to US$1,899.70 per oz., and the S&P/TSX Global Gold Index fell by 1.20% to 364.79.

Endeavour Mining rose $1.49 to $35.28 per share. The company resumed operations at its Boungou mine in Burkina Faso following its closure a year earlier by the previous owners Semafo, after an attack that killed 39 people. The reopening of the mine follows infrastructure improvements and a new security plan developed in partnership with Burkina Faso’s government. Endeavour acquired Semafo in July and identified potential synergies of US$35-40 million during the integration process, with about 60% of the benefit to be progressively unlocked by the end of 2020 and the remaining in 2021. The company noted that Boungou has been processing stockpiles since early 2020, and expects the mine to achieve the top half of its 2020 production guidance range of 130,000-150,000 oz. gold at an all-in sustaining costs of US$680-$725 per ounce.

Shares of Argonaut Gold fell 4¢ to $2.70. The company’s board approved the construction of its wholly-owned Magino gold project in Ontario. According to Argonaut, the construction of the mine is slated to start in January 2021 and is expected to take two years, with the first gold pour at the operation anticipated in 2023. Before the build can begin, the company first needs to file a closure plan and post an assurance bond with the province. A 2017 feasibility study estimates the initial capital costs for the project at US$321 million; however, more recent estimates put the initial outlay at US$360-$380 million, which includes contingency and inflation. To meet the updated costs, the company has developed financing that covers over US$400 million in costs through to 2022.

Kirkland Lake Gold dropped $1.32 to $65.85 per share. The company reported third-quarter gold production of 339,584 oz., a 3% increase over the 329,770 oz. generated in the previous quarter. The Detour Lake and Fosterville mines led this output, producing 140,067 oz. and 161,489 oz. over the period, respectively. Kirkland sold 331,811 oz. gold during the period, closing out the quarter with US$848 million in cash, a 58% increase during the reporting period. The company also generated US$109.1 million from the sale of 32.6 million shares in Osisko Mining and received a US$75-million payment from Newmont as part of a strategic alliance agreement on properties around Timmins, Ontario. With the strong bottom-line performance, Kirkland grew its quarterly dividend to by 50% to US18.75¢ per share, which will come into effect with the fourth quarter payout.