TSX rises, April 27-May 1: MAG Silver, Lundin Gold, Troilus, SolGold

The S&P/TSX Composite Index rose 1.39% to 14,620.30 during the April 27-May 1 trading week. The Global Mining Index fell 0.81% to 82.25 and the Global Base Metals Index climbed 1.18% to 75.24. Spot gold dropped US$26.60 per oz., or 1.54%, to finish at US$1,702.90, and the Global Gold Index fell 1.32% to 342.27.

News that Eric Sprott invested $60 million into MAG Silver sent the company’s shares up $2.49 to finish the trading week at $16.12. Sprott purchased 4.528 million common shares in the equity placement at $13.25 apiece, giving him a direct 5% stake in the company. The funds mainly will be used to finance the company’s 44%-owned Juanicipio silver mine project, which is advancing towards production this year in Mexico’s Zacatecas state. Juanicipio is operated by Mag Silver’s joint-venture partner Fresnillo, which owns 56% of the project.

Lundin Gold’s shares jumped $1.52 to $11.27. The company announced that Newcrest Mining acquired the project financing package provided to Lundin Gold’s Fruta del Norte mine in Ecuador by Orion Mine Finance Group and funds managed by Blackstone. The Orion and Blackstone project financing package, put in place in 2017, is made up of a gold prepay credit facility for $150 million, a stream loan credit facility of $150 million and an offtake agreement for 50% of gold production up to a maximum of 2.5 million ounces. Orion and Newcrest continue to own 10.79% and 31.85% stakes, respectively, in Lundin Gold.

Troilus Gold jumped 28% to $1.05 per share on news it increased its land holdings more than five-fold in the Frotet-Evans greenstone belt. The company acquired 627 claims over 334 sq. km to the south and southwest of its Troilus gold project from O3 Mining for 1.7 million common shares and a 2% net smelter return (NSR) royalty. (Troilus can repurchase a 1% NSR at any time for $1 million.) In addition, Troilus staked 629 new claims over 338 sq. km, bringing the company’s total land package to 834 sq. km and making it the largest mineral claims holder in the belt. Over the last 24 months, the company has completed more than 80,000 metres of drilling and defined a mineral resource estimate of 4.71 million gold-equivalent oz. in the indicated category and another 1.76 million gold-equivalent oz. inferred.

Metallurgical results from its Alpala copper-gold project in Ecuador sent SolGold’s shares up 25.7% to 44¢. The company said improved recoveries in new metallurgical tests suggest an increase in revenues from the project, which would be incorporated into a prefeasibility study. SolGold said the testwork demonstrated a life of mine increase in gold recovery by 7% compared to the November 2019 preliminary economic assessment (PEA) and the ability to produce 26%-30% copper concentrate (plus gold and silver) for the modelled mine life. In addition, the tests showed low deleterious elements in the concentrate and that all composite samples responded well to conventional froth flotation with high valuable metal recovery rates overall.