TSX drops June 8-12: Barrick, Starcore, B2Gold

Concerns about a new surge of coronavirus infections sent the S&P/TSX Composite Index down 3.77%, or 597.50 points, to finish the June 8-12 trading week at 15,256.57. Spot gold rose 2.76%, or US$46.50 per oz., to close at US$1,730.50 per oz., and the S&P/TSX Global Gold Index climbed 2.07%, or 6.28 points, to 309.78. Other indexes were mixed. The S&P/TSX Base Metals Index fell 3.71% (3.41 points) to 88.60 while the S&P/TSX Global Mining Index finished at 85.44, up 0.36% (0.31 points).

Shares of Barrick Gold rose $1.45 to $32.74. The company denied claims that it sought to unlawfully export gold from the Porgera mine in Papua New Guinea that it jointly owns with China’s Zijin Mining. On June 5, Papua New Guinea’s mining regulator had accused Barrick Niugini (BNL) – the operator of the mine – of seeking to illegally export US$13 million in silver and gold to Australia. The country’s Mineral Resources Authority said the move would be illegal given that BNL is not allowed to process or ship gold, since the government refused to extend the mining lease for Porgera several months ago. Barrick CEO Mark Bristow told Bloomberg news that the joint-venture “categorically rejects any claim that it, or its representatives, have violated the law in any way.”

Bristow also explained that the dispute centred around gold that had been processed from ore that remained in its milling circuit after the mine was placed on care and maintenance and said a Papua New Guinea court has granted the company the right to challenge the government’s decision to deny its mining licence and that a judicial review to assess whether the government followed due process will be held on July 20. Operations at the mine were halted in late April, following Prime Minister James Marape’s decision not to renew its lease. Barrick, which is challenging the resolution in court, welcomed last month a ruling ordering the PNG government to review the requested lease extension for the Porgera mine. Barrick and Zijin applied in June 2017 for a 20-year renewal of the Porgera’s lease, which expired in August 2019.

Shares of Starcore International jumped 61% to 15¢ on news that the company had repaid all of its debt. The payments were made from the company’s cash flow generated from its mine operations and prior asset sales. Robert Eadie, Starcore’s CEO, said the company can now direct its positive cash flow to improving production at its San Martin gold and silver mine, an underground epithermal deposit with an average grade of 2.31 grams gold per tonne and 18 grams silver. The mine has operated since 1993 and Starcore acquired the asset from Goldcorp in February 2008. Goldcorp acquired the property through the takeover of Wheaton River.

B2Gold’s shares climbed 8¢ to $6.97. The company declared a cash dividend for the second quarter of 2¢ per share, up from its previous quarterly dividend of 1¢ per share. B2Gold forecasts consolidated gold production this year of between 1 million and 1.06 million ounces.