TSX posts mixed results, Oct. 1-5

Canada’s benchmark index fell 0.9% to 15,946.17 and the S&P/TSX Global Mining Index fell 0.39% to 65.54. Gold performed better, however, as the S&P/TSX Global Gold Index rose 2% to 157.14, and the gold price rose 0.9% to US$1,202.70.

Shares of Prophecy Development rose 138% to 29¢, after the company reached an agreement with the U.S. Bureau of Land Management (BLM) to expedite permitting efforts at its Gibellini vanadium project in Nevada’s Battle Mountain trend. The company agreed to reimburse BLM — under a fixed cost structure — the price of all work needed to review its mine plan of operations.

BLM also said Gibellini’s environmental impact statement would be the first in Nevada to undergo a streamlined review process. Prophecy will soon submit a water pollution control permit application to Nevada.

A May 2018 preliminary economic assessment assigned Gibellini a US$338-million, after-tax net present value at a 7% discount rate and a 50.8% after-tax internal rate of return, with payback less than a year from start-up.

Shares of Pershing Gold rose 17% to $1.88 after announcing it would merge with Americas Silver. Pershing shareholders will receive 0.715 share of Americas Silver for each Pershing share they own. The deal values Pershing shares at US$1.69, based on Americas Silver’s New York Stock Exchange closing price on Sept. 28.

The deal gives Americas Silver a shovel-ready project in Pershing’s Relief Canyon gold project. A 2018 feasibility study gave the Nevada project a US$133-million, after-tax net present value at a 5% discount rate and an 87% after-tax internal rate of return. Pershing can leverage Americas Silver’s experience and access to capital to help build its mine.

Shares of Hudbay Minerals fell 58¢ to $5.96, after it was reported the company is in talks to acquire Chilean miner Mantos Copper in a US$780-million deal. The company did not deny the claim, but said in a press release that it “has had a consistent strategy of optimizing the value of its current operations and evaluating growth opportunities that are complementary to its current business, and that it continues to adhere to this strategy.” Mantos is looking for a buyer to finance an expansion that would double copper production from its current operations.

In response to the report, 4.8% Hudbay shareholder Waterton Global Resource Management sent a letter to Hudbay’s board demanding Hudbay “immediately terminate any discussions or plans to execute the Mantos Transaction, and any other material acquisitions in the near future.” Waterton said Hudbay should instead focus on fixing operational issues within its current portfolio.