Rising gold stocks push TSX to highest levels since April 2011

TORONTO — Rising gold stocks helped push the Toronto stock market higher Friday on top of three straight days of advances that have left the TSX at its highest levels since April 2011.The S&P/TSX composite index was ahead 75.26 points to 13,906.84.The Canadian dollar slid 0.36 of a cent to 91.17 cents US.U.S. indexes were mixed amid U.S. earnings reports from a variety of sectors and economic data showing rising industrial production and declining housing starts.The Dow Jones industrials rose 64.92 points to 16,481.93, the Nasdaq was 13.77 points lower to 4,204.92 and the S&P 500 index was off 3.49 points at 1,842.4.General Electric’s net income rose 5% to $4.2 billion in the fourth quarter on rising profits from the sale of aircraft engines, oil and gas drilling equipment and appliances. Ex-items, GE met analyst expectations of 53 cents a share but its shares fell 71 cents to $26.48.Investment bank Morgan Stanley earned $433 million, or 20 cents a share, in the fourth quarter. That compared with $982 million, or 49 cents a share, a year earlier. Ex-items, it earned 50 cents a share, six cents ahead of estimates and its shares gained $1.36 to $33.36.After the close Thursday, Intel said its fourth-quarter net income rose 6% to $2.63 billion or 51 cents a share, as the company offset flat demand for its personal computer chips with higher sales of other products. Revenue rose 3% to $13.83 billion. Analysts expected a profit of 52 cents per share on revenue of $13.72 billion and its shares dropped 96 cents to $25.58.Analysts note that the start to the fourth-quarter earnings season this past week has been positive but with the Dow and S&P 500 trading at all-time highs, there are fairly high expectations.“Companies are more or less getting to expectations but they’re not beating, we’re not getting the upside surprises that can ignite the next round of gains,” said Colin Cieszynski, Canadian markets specialist at CMC Markets Canada.“Intel is a good example of this, pretty lacklustre, they missed by a penny, they marginally beat on sales, sales guidance is flat and then the stock is down about 4%.”Elsewhere, Dollarama Inc. (TSX:DOL) said bad weather had a severe impact on its December sales but that they have been trending back to normal levels. The Montreal-based retailer says comparable-store sales in the normally busy month were down 7.5%.Dollarama edged 64 cents lower to C$82.44.RBC also downgraded Bombardier (TSX:BBD.B) to sector perform from outperform after the transport giant said that its flagship new airliner will be going into service later than expected. Its stock fell 7.74% Thursday on the news and lost a penny to $4.16 Friday.The TSX gold sector, the worst performing component on the Toronto market last year, ran up almost four%.The sector fell almost 50% last year and “I think a lot of people dumped it at the end of last year to get it off the books and now you’re seeing the relief rally,” said Cieszynski.February bullion rose $11.70 to US$1,251.90 an ounce. Barrick Gold (TSX:ABX) advanced 70 cents to C$20.62 while Goldcorp (TSX:G) gained $1.06 to $25.44.The tech sector climbed 0.8% as BlackBerry (TSX:BB) rose 35 cents to $9.72.Financials were also positive, up 0.5% with Royal Bank (TSX:RY) ahead 65 cents to $72.01.The energy component was up 0.35% as the February crude contract on the New York Mercantile Exchange rose 29 cents to US$94.25 a barrel.March copper was unchanged at US$3.35 a pound, and the base metals sector lost early momentum to move down 0.2%. Nevsun (TSX:NSU) was up 16 cents to $4.10.On the economic front, the U.S. Commerce Department said Friday that builders broke ground last month at a seasonally annual rate of 999,000 homes. That’s 9.8% lower than November’s pace of 1.12 million, which was the fastest in five years.For the year, builders started 923,000 homes and apartments, up 18.3% from 2012.Applications for building permits, considered a good sign of future activity, fell three% in December to a rate of 986,000.Other data showed that U.S. factory production rose 0.4% in December, following gains of 0.6% in both November and October. read more

Trevali grows zinc production substantially through Glencore deal

first_imgGlencore plc has entered into a definitive agreement with Trevali Mining Corp, whereby Trevali will purchase Glencore’s 80% interest in the Rosh Pinah mine in Namibia and 90% interest in the Perkoa mine in Burkina Faso. The aggregate consideration is $400 million, of which $244 million is to be paid in cash, with the remaining $156 million paid by Trevali through the issuance of 175,125,304 share. Trevali will additionally pay Glencore $30 million to repay an existing debt facility. The transaction is subject to customary regulatory approvals and is expected to close by July 2017.The transaction will add two African zinc assets to Trevali’s portfolio of mines in Peru and Canada, creating the only global mining company focused on zinc. The transaction will materially increase Trevali’s geographic footprint and access to global capital markets. This will enable the company to take advantage of the significant opportunities to grow across the zinc market.Glencore will increase its direct ownership in Trevali from 4% to 25% and its board membership to a total of two seats.Following the completion of the transaction, Trevali will have an annual production of some230,000 t of contained zinc and will have operational presence in North America, South America and Africa. Glencore will have the offtake from all four of Trevali’s mines.Trevali expects that, upon completion of the transaction, the assets would deliver high-quality, long-life zinc production to Trevali’s existing portfolio, improving asset and geographic diversification, and would create a premier TSX-listed global zinc producing company.Creates the only publicly-traded, pure-play intermediate zinc producerMore than doubles Trevali’s current production scale to approximately 410 Mlb payable of annual zinc production, to position the company as a top-10 global zinc producerMaintains an attractive cash-cost profile with increased leverage to zincRefinanced balance sheet significantly reduces cost of capital and increases covenant flexibility to pursue M&A opportunitiesFurther builds on Trevali’s long-standing strategic relationship with Glencore, which will become a cornerstone investor (25%) in TrevaliDiversifies the portfolio and creates a global platform to enable future growthAddition of Glencore’s industry-leading operating and management teams.Dr Mark Cruise, President and Chief Executive Officer of Trevali: “The acquisition of Rosh Pinah and Perkoa is a historic event and unique opportunity for Trevali shareholders, and sets the stage for a multi-asset, low-cost global zinc producer. The assets provide strong upside to shareholders in the current strengthening macro-zinc environment through scale of production as well as an attractive package of exploration ground.”Commenting on the transaction, Daniel Mate, Glencore’s Head of Zinc Marketing, said: “We are pleased to strengthen our partnership with Trevali as they embark on the development of the premier zinc company in the market. Trevali has a proven track record in the sector demonstrated by the success in opening up the Santander mine in Peru and the Caribou mine in Canada. We have been working together as partners since their first mine was built and we share the same vision for the future growth of the business through value-creating organic and inorganic growth opportunities. We are excited to form part of this unique global zinc vehicle, providing pure zinc exposure across a wide geographic footprint”last_img read more