Precious Metals

Gold Investing

Positive jobs data could spur the US Federal Reserve to raise interest rates in December.

The gold price took a steep plunge last week after the US Federal Reserve elected not to raise interest rates, and has continued to fall since then. 
While it began the week just above $1,140 per ounce, by Thursday at 3:00 p.m. EST it was trading at just $1,103.30. Prior to the Fed’s announcement, the gold price was changing hands at about $1,175.
Low interest rates are typically positive for gold, so it might seem strange that the Fed’s news did not spur a gold price jump. Analysts have explained the unusual behavior by pointing out that many investors now believe the Fed may hike rates at its next meeting, scheduled for December 15 to 16.
And they have reason to. According to The Wall Street Journal, Fed Chair Janet Yellen reiterated Wednesday that a December rate increase is possible if economic growth remains on track.
One hint about economic growth will come Friday, when US employment data is released. According to the news outlet, many believe those numbers will give a clear picture of how the US economy is performing, and thus may offer guidance on a potential rate hike.

Miners release Q3 results

The third quarter of 2015 ended a month ago, but miners continue to release their results. Here’s a brief look at a few gold companies that did so this week.
Monday saw Timmins Gold (TSX:TMM,NYSEMKT:TGD) release its Q3 operating and financial results. It commented that it produced and sold 23,387 ounces of gold, down from 26,671 in the year-ago quarter; the decrease was “primarily due to the grade of the ore stacked during the preceding quarter.”
On the financial side, the company incurred a loss from operations of $230.2 million, largely due to a total impairment charge of $226.5 million. The impairment charge was the result of adjustments to the mine plan for its San Francisco mine. In Q3 2014, Timmins reported earnings from operations of $3.9 million.
Also on Thursday, Richmont Mines (TSX:RIC,NYSEMKT:RIC) put out its Q3 operating and financial results, noting that its gold output for the period came to 23,478 ounces. In all, the company sold 22,962 ounces of gold, generating total quarterly revenues of US$26.1 million. Quarterly earnings came to US$2.5 million, or US$0.05 per share.
The same day, McEwen Mining (TSX:MUX,NYSE:MUX) released its Q3 operating and financial results, reporting record output of 43,390 gold equivalent ounces.
Consolidated net income came in at $2.6 million, or $0.01 per share, up from a net loss of $13 million in the year-ago period. Meanwhile, adjusted net income for the quarter was $0.3 million compared to an adjusted net loss of $8.3 million in Q3 2014.

Other gold news

Q3 results may be at the top of investors’ minds right now, but gold-focused companies also continue to conduct exploration and development work at their projects. Here are a few highlights from this week.
Rubicon Minerals (TSX:RMX,NYSEMKT:RBY) fell into the spotlight on Tuesday when it announced plans to suspend underground activities at its Phoenix gold project. It said it needs to enhance the geological model for the F2 deposit and develop a project implementation plan.
The news has been much discussed by market watchers, with many stating that the suspension highlights the risk of building a mine without having enough information. Writing for the Financial Post, Peter Koven points out that Rubicon never completed prefeasibility or feasibility studies for Phoenix, and “may have identified … problems much sooner if it hadn’t moved so quickly.”
On a brighter note, on Wednesday Bonterra Resources (TSXV:BTR) released assay results from the first hole completed as part of a Phase 1 drill program at its Quebec-based Gladiator gold project. The hole encountered the main zone 175 meters below surface, intersecting 14 g/t gold over 6.6 meters; that includes a high-grade section of 104.5 g/t gold over 0.8 meters.
Finally, Pilot Gold (TSX:PLG) released the first resource estimate for the Nevada-based Kinsley project on Thursday. All in all, the project hosts an indicated resource of 5,529,000 tonnes containing 405,000 ounces of gold at 2.27 g/t. The indicated resource stands at 3,362,000 tonnes containing 122,000 ounces of gold at 1.13 g/t.
Pilot Gold owns about 79.1 percent of Kinsley, while a subsidiary of Nevada Sunrise Gold (TSXV:NEV) owns the rest and is Pilot’s joint venture partner on the project.

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Richmont Mines and Nevada Sunrise Gold are clients of the Investing News Network. This article is not paid-for content. 


S&P 5004263.05-17.10


Heating Oil3.42-0.10
Natural Gas8.46-0.31