Precious Metals Weekly Round-Up: Gold Dips on Positive US Jobs Report

Both gold and silver prices trended down on Friday morning (September 7), following an upbeat US jobs report, which caused the US dollar to gain steam and push the precious metals down.

As of 9:00 a.m. EST, the yellow metal was trading at US$1,193.70 per ounce after it hit an almost one-week high in the previous session. As for the white metal, it was trading at US$14.09 per ounce as of 9:02 a.m. EST.

The jobs report showed that nonfarm payrolls surged by 201,000 jobs last month, boosted by hiring at construction sites, wholesalers and professional and business services.

For their part, platinum and palladium both declined for the week. As of 10:00 a.m. EST, platinum was trading at US$782 per ounce, while palladium landed at US$980 per ounce.

Precious metals top news stories

Our top precious metals stories this week featured Northern Star Resources (ASX:NST) completing its AU$175-million capital raise to help fund the acquisition of the Pogo underground gold mine located in Alaska, a price update for goldand Coeur Mining’s (NYSE:CDE) Silvertip silver-zinc–lead project beginning commercial production.

1. Northern Star Raises Capital to Acquire Pogo Gold Mine

Northern Star Resources (ASX:NST) completed its AU$175-million capital raise to help fund the acquisition of the Pogo underground gold mine located in Alaska.

At the end of August, Northern Star agreed to acquire Pogo from Sumitomo Metal Mining and Sumitomo for AU$347 million, leading to the placement, which was completed at AU$6.70 a share. Approximately 26.1 million new shares were placed with institutional investors, with current shareholder BlackRock Investment Management committing to AU$57 million of new shares.

“Existing shareholders, fund managers and analysts from around the world have said they share our view that Pogo is an exceptional acquisition, which meets our criteria of owning tier one assets with strong growth potential in tier one locations,” said Bill Beament, executive chairman.

2. Gold Price Rises as US Dollar Rally Loses Steam

The gold price climbed on Wednesday (September 5) after the US dollar rally lost momentum.

The greenback took a hit when both the pound and the euro were boosted following a report that Britain and Germany were prepared to drop a key sticking point in Brexit negotiations.

The yellow metal made the gains after experiencing an 11-day low in the previous session, and with gold still close to a one and a half year low, many insiders believe that there is little room for prices to fall.

“Gold is showing signs of bottoming,” said Carsten Menke, Julius Baer analyst.

3. Coeur Mining Announces Commercial Production at Silvertip Mine

Coeur Mining’s (NYSE:CDE) Silvertip silver-zinc–lead project has began commercial production, prompting the miner to update its full-year guidance.

Coeur purchased the mine, which is located in Northern BC, in October of last year with initial production beginning in March 2018.

“[O]ur team has been focused on optimizing plant performance and on upgrading the mine’s infrastructure. We continue to be excited about the impact Silvertip is expected to have on our production, margins and cash flow beginning next year,” said Mitchell J. Krebs, president and CEO.

Also in the news

Also making news this week was Galantas Gold (TSXV:GAL,ASX:GAL) and its announcement of a private placement for a maximum of 30 million shares, at C$0.071 a share.

The deal should achieve gross proceeds of C$2.1-million, which the company will use for working capital purposes and to continue development of an underground mine on Northern Ireland’s Omagh gold mine.

Platinum miner Northam Platinum (JSE:NHM) also made news this week when the company announced its growth, diversification and optimization strategy was back on track.

Northam attributes the rebound to progress being made at its Booysendal South and Zondereinde mines, in Limpopo.

During the second quarter, the commissioning of the new furnace at Zondereinde helped to boost total refined metal production by 5.2 percent to 549,000 ounces of equivalent refined six-element platinum-group metals.

The company also noted that in Q2 the average dollar-basket price increased by 13 percent, owing largely to higher palladium and rhodium prices, which rose by 33 percent and 101 percent, respectively.

“Full mine to market unit cost increases were contained to 7.8 percent in line with mining inflation to R21 270 a platinum ounce. We believe this positions Northam favourably on the industry cost curve,” said Paul Dunne, CEO.

Finally, gold mining group Pan African Resources’ (LSE:PAF) Barberton Mines concluded a three-year wage agreement with the National Union of Mineworkers (NUM) and Uasa.

The agreement provides for an average yearly wage increase of about 6.5 percent and 5.5 percent for NUM and Uasa members, respectively.

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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.