TSX falls during May 2-6 trading week

Over the May 2-6 trading period, the S&P/TSX Composite Index inched 58.94 points or 0.28% lower, to 20,633.28. The S&P/TSX Global Mining Index lost2.83 points or 2.52% to 112.16 and the S&P/TSX Global Base Metals Index fell 8.22 points or 4.37% to 188.01. The S&P/TSX Global Gold Index fell by 0.91 points or 0.28% to 323.52 and spot gold ended the week US$12.65 per oz. higher, or 0.67%, at US$1882.35 per ounce. 

Shares of Barrick Gold rose by 23¢ to $28.88 during the trading week. The company’s CEO Mark Bristow, said that a change in the government of Pakistan would not impact the development of Barrick’s US$7-billion Reko Diq copper-gold project in Balochistan province. After reaching a deal in March to restart the stalled project with  Prime Minister Imran Khan’s government, , Khan was ousted from office through a parliamentary vote in early April. He was replaced by Shehbaz Sharif, leader of the former opposition party. “Of course, there are going to be challenges and bumps along the road,” Bristow said. “Despite starting in sort of a conflict situation, the state of Pakistan – and we have been through many governments in this process – has always upheld our agreements and I think that bodes well for a long-term partnership.” Barrick believes that Reko Diq is one of the world’s largest undeveloped open pit copper-gold porphyry deposits, but some analysts believe that Pakistan’s lack of experience in mining and its political instability make this a risky deal. Bristow, however, said that he was “very comfortable” with the project. He added that this was the “perfect opportunity for the mining industry to demonstrate what it can bring to an economy” of a region (Balochistan) that has been “neglected” and struggles to get access to potable water.   

Shares of Amerigo Resources gained 6.9% to $1.70 as the company reported a higher net income on a year-on-year basis in its first quarter. Its net income in the first quarter of 2022 was $15.5 million compared to $10.9 million in 2021. The increase was due to higher copper production and higher metal prices, the company said. Amerigo produced 16.5 million lb. of copper during the quarter, 6% higher than the same period last year due to higher tonnage, grade and recoveries from fresh tailings. Its molybdenum production though fell by half to 200,000 lb. from 400,000 lb. due to lower metal content in fresh tailings.  

Shares of Equinox Gold fell $1.66 or 18.1% to $7.50 as its production in the first quarter failed to meet analysts’ expectations. The company produced 117,452 oz. gold, which was about 16% lower than forecast. It was also lower than its first quarter production in 2021 of 129,233 oz. gold.  Despite the weak quarter, the company said that it expects 60% of production and 85% of cash flow to come in the second half of the year.