TSX posts gain, Nov. 11-15: Franco-Nevada, Detour, Kirkland Lake, Caledonia Mining

The S&P/TSX Composite Index rose 0.89% to close at 17,028.47. The S&P/TSX Global Mining Index gained 0.51% to 76.43 and the S&P/TSX Global Base Metals Index fell 2.47% to 102.61. The S&P/TSX Global Gold Index increased 2.4% to 239.57, and spot gold moved 0.62% higher to US$1,467.90 per ounce.

Franco-Nevada’s shares jumped $4.50, or 3.56%, to $131.02 apiece. The start of precious metal deliveries from Cobre Panama, which declared commercial production one month ahead of schedule on Sept. 1, and the addition of a new energy royalty in the Marcellus, resulted in strong growth during the third quarter. The company sold a record of 133,219 equivalent oz. gold at cash costs of US$276 per equivalent oz. gold. The company reported net income of US$101.6 million, or US54¢ per share, and adjusted earnings before interest, tax, depreciation and amortization of US$192.9 million, or US$1.03 per share.

Detour Gold climbed $2.64 per share, or 14%, to $21.39. The company reported adjusted net earnings of US$35.3 million (20¢ per share) in the third quarter, compared to an adjusted net loss of US$1.5 million (1¢ per share) in the year-earlier quarter. Gold production came in at 137,670 oz. at all-in sustaining costs (AISCs) of US$1,198 per oz. sold and total cash costs of US$730 per oz. sold, representing a 13% and 9% improvement, compared to the same quarter last year. Detour is increasing the lower end of its 2019 production guidance range to 590,000 to 605,000 oz. gold, and expects production to be towards the upper end of that range. It is lowering the AISC guidance range for 2019 by US$75 per oz. to US$1,100 to US$1,175 per ounce.

Shares of Kirkland Lake Gold went up $2.21, or 3.7%, to $62.01. The company posted record net earnings in the third quarter of $176.6 million, or 84¢ per share — more than triple the net earnings of $55.9 million, or 27¢ per share, in the same quarter last year. Gold production rose 38% to 248,400 oz. Production costs rose to $73.7 million from $64.9 million in the year-earlier quarter, while AISCs per oz. sold averaged US$562 — a 13% improvement from the US$645 per oz. in the third quarter of 2018. Kirkland raised its quarterly dividend by 2¢ to 6¢ per share, and ended the quarter with US$615.8 million in cash — a 31% increase from the US$469.4 million it had at the end of June 2019.

Caledonia Mining’s shares fell 55¢, or 4.96%, to $10.54. The company’s Blanket mine in Zimbabwe produced 13,646 oz. gold in the third quarter in a 7.3% increase from the second quarter, despite extended power outages in July and August. AISCs came in at US$872 per oz., a 15.6% increase from the year-earlier quarter, partly resulting from higher royalty payments due to the increased gold price. Net profit attributable to shareholders reached $7.1 million — a 215% increase year-on-year. The higher profit included foreign exchange gains arising from the devaluation of Zimbabwe’s currency.