US markets rise during the Jan. 24-28 trading week

The Dow Jones Industrial Average climbed 460.1 points or 1.34% to 34,725.47 and the S&P 500 rose 33.91 points or 0.77% to 4,431.85. Spot gold dropped US$44.00 per oz. or 2.4% to finish the Jan. 24-28 trading week at US$1,791.60 per ounce.  

Turquoise Hill Resources climbed US$2.19 or 14.2% to US$17.64 per share. The company announced on January 24 that it had reached an understanding with the government of Mongolia for a “renewed partnership” and that it received approval for the commencement of the undercut, namely the commencement of blasting that will start the Oyu Tolgoi  underground mine production. Consequently, the company said it expects to begin caving operations in the coming days. The company expects the underground mine to achieve sustainable production in the first half of 2023. As part of the agreement with the Mongolian government, Turquoise Hill has agreed to waive the US$2.4 billion carry account loan of the government’s state-owned entity through which it owns its interest in the Oyu Tolgoi LLC. The company also said it reached an amended agreement with Rio Tinto that “provides a pathway forward to address” the company’s funding requirements. Oyu Tolgoi, which produced about 163,000 tonnes of copper in 2021 from its open pit mine, is expected to produce about 500,000 tonnes of copper annually from 2028 to 2036 from the open pit and the underground mine.  

Shares of Gatos Silver fell by 70.3% or US$7.24 to US$3.06. On January 25 the company announced that there were errors in the technical report it filed in July 2020 on its Los Gatos project in Mexico and that there were indications of an “overestimation” in the existing resources. The company expects a potential reduction of the mineral content ranging from 30%-50%, after depletion. It said that the geological structures and mineral veins were “more complex than previously modeled.”  The company said it was working with independent engineering consultants to “better understand the magnitude of the overestimations,” a process that will lead to the creation of a new resource estimate and a life of mine plan by the second half of this year.  If the company finds that the technical report “materially overestimated resources and reserves, it could constitute an event of default under the company’s credit facility,” in which case, it would seek a waiver from its lender. 

Shares of Freeport-McMoRan fell US$4.95 to US$36.04. The company reported full-year 2021 net income attributable to shareholders of US$4.31 billion on revenues of US$22.85 billion, up from 2020 net income of US$599 million on revenue of US$14.19 billion. The company produced 3.84 billion lb. copper, 1.38 million oz. gold, and 85 million lb. molybdenum last year. Average unit net cash costs for copper in 2021 were US$1.34 per lb. and Freeport expects them to average US$1.35 per lb. in 2022.