US markets tank, March 16-20: Sandstorm, Alamos Gold, Rio Tinto

The Dow Jones Industrial Average fell 17.30% (4,011.64 points) to 19,173.98 and the S&P 500 dropped 14.98%(4,061.1 points) to 2,304.92 during the Mar. 16-20 trading week. Spot gold fell US$31.10 per oz. to finish at US$1,498.80 per oz., a 2.03% decrease.

Sandstorm Gold rose US64¢ to US$4.52. The company announced that it has withdrawn its 2020 guidance due to the COVID-19 pandemic. “Although Sandstorm has not received any direct notification of closures at any partner mine sites, we believe it is reasonable to expect that actions taken to reduce the spread of COVID-19 will affect global mining production levels during 2020,” the company said in a Mar. 19 press release. It also notified shareholders that its annual general meeting will be held on a virtual electronic basis.

Shares of Alamos Gold rose US56¢ to US$4.45. The company reported on Mar. 16 that it had entered into an agreement to acquire and cancel a 3% net smelter return royalty payable on production from the Island gold mine for $75 million. The royalty was acquired from a privately held company and is payable on gold production within four patented claims that make up the majority of the Island gold mine’s mineral reserves and resources. “The acquisition of the royalty further reduces costs at what is already a low-cost operation while also increasing our exposure to the tremendous exploration upside,” John McCluskey, Alamos Gold’s president and CEO stated in a news release. The company forecasts the mine will produce between 130,000 and 145,000 oz. gold this year at total cash costs of US$480-520 per oz. and all-in sustaining costs of US$740-780 per oz.

Rio Tinto fell US$7.33 to US$36.57 per share. The company reported on Mar. 18 that a 5.7-magnitude earthquake close to the town of Magna had impacted its Kennecott mine near Salt Lake City in Utah. Rio Tinto has shut it down temporarily, and all of its employees are safe. It is also actively monitoring and managing an inactive historic tailings storage facility at the site. The company also updated shareholders about its Oyu Tolgoi operation. It noted that since January the movement of goods and people within Mongolia has been restricted within and across its border. On Mar. 16 the company announced that work on the underground project continues, but that progress is being slowed as a result of measures taken to contain the spread of COVID-19. The mine design for the underground project remains on track to be completed in the first half of this year, it said in the news release.