Wall Street gets slammed, Dec. 8-12

The market sell-off on Wall Street was one of the worst in more than two years as oil dropped below US$62 a barrel and China reported more weak economic data. The S&P 500 Index fell 3.5% to 2002.33 and the Dow Jones Industrial Average declined 3.8% to 17,280.83. Gold climbed 2.4% to US$1,221.80 per oz. and the Philadelphia Gold & Silver Index was down 2.1% at 68.68.

An investment by China’s Zijin Mining Group sent shares of Pretium Resources up US29¢, or 5%, to US$5.99 per share. Zijin agreed to buy 12.8 million shares of Pretium at C$6.30 per share for proceeds of C$80.87 million. The offering gives Zijin, China’s largest gold producer, a 9.9% stake in Pretium and its Brucejack project.  

Dominion Diamond advanced US25¢ to US$17.82 per share. The company reported consolidated net income of US$25.5 million, or US30¢ per share, in the fiscal third quarter of 2015. The consolidated earnings before interest, taxes, depreciation and amortization margin grew to 52%, driven by higher diamond recoveries and cost control.

Freeport-McMoRan’s shares were the most actively traded, falling US$4.23 to US$21.78 per share. Contributing to the company’s woes was a Bloomberg story reporting that an investor is accusing Freeport’s board of improperly awarding more than US$35 million in stock to CEO Richard Adkerson after the company’s acquisition in 2012 of two oil and natural gas companies. 

Eric Kinneberg, Freeport’s director of external communications, said in an email to The Northern Miner that the board believed Adkerson should be kept as CEO after the acquisitions, but said his employment agreement gave him the option of resigning and receiving a severance payment. “The one-time restricted stock unit grant to Mr. Adkerson that is criticized in the complaint served the best interests of our shareholders by eliminating the more expensive payout provided for in his employment agreement while incentivizing an experienced and skilled CEO to remain in his position at a time of significant transformation at the company,” Kinneberg said. “The company intends to vigorously defend the board’s action in this matter.”