A roundup of some of the North American equities making moves in both directions today
On the rise
Continental Gold Inc. (CNL-T) jumped 10.7 per cent on Monday after Zijin Mining Group Co Ltd, one of China’s biggest gold miners, announced it has signed an agreement to buy Canadian miner, saying the purchase would increase its gold reserves and boost cash flow and profit.
Zijin will pay $5.50 per share in cash for Continental, a premium of about 13 per cent to the Canadian company’s closing price on Friday, as it aims to secure Continental Gold’s flagship Buriticá gold project, the Chinese company said in a filing to the Shanghai Stock Exchange.
The Buriticá gold project has measured and indicated gold reserves of 165.47 tonnes and an inferred reserve of 187.24 tonnes, Zijin said.
Continental chief executive officer Arti Sussman said the project is expected to reach production next year and the “timing is right for Continental to sell to a more experienced mine operator.”
The Denver-based miner now expects attributable gold production guidance of 6.7 million ounces at all-in sustaining costs of US$975 per ounce. Attributable gold production is expected to be between 6.5 and 7.0 million ounces per year longer-term through 2024 with improving costs.
The Company also expects to produce approximately 1.1 million gold equivalent ounces from other metals in 2020 and increasing longer-term through 2024.
Separately, it announced it has entered into a contractual arrangement to support Zijin Mining Group’s bid to acquire Continental Gold Inc. by selling its 19.9-per-cent equity stake and its convertible bond for US$260-million.
The deal includes US$25-million in cash and approximately 11.2 million Maverix common shares, representing a 9.4-per-cent ownership interest in Maverix.
“This agreement realizes the value of our royalty portfolio today while also providing upside exposure through a meaningful equity position in Maverix, a company with a proven track record of growth,” said Kinross president and CEO J. Paul Rollinson.
Maverix shares were 4.2 per cent higher.
Hudson’s Bay Co. (HBC-T) was up 0.2 per cent after Catalyst Capital Group Inc. extended a deadline for the board to formally accept its offer letter until 5 p.m. ET today. The investment firm has made an unsolicited offer of $11 per share in cash for HBC, topping a friendly offer of $10.30 made by a group of investors led by HBC executive chairman Richard Baker.
Catalyst says it extended the deadline at the request of a special committee of the board at HBC because of what it called “indications of positive progress.” The special committee has said it would review the offer in consultation with its independent financial and legal advisers.
On the decline
Canadian oil and gas producer Husky Energy Inc. (HSE-T) slipped 0.9 per cent after it said on Monday it would lower its capital spending by $500-million over the next two years when compared to its 2019 outlook in a bid to increase free cash flow.
Oil producers have been under pressure from investors to cut activities and use the cash to improve shareholder returns through dividends and buybacks. The company said it expects 2020 capital expenditure to be between $3.2-billion and $3.4 billion, $100-million lower than its 2019 forecast of $3.3-billion to $3.5-billion.
For 2021, Husky aims to further reduce spending by $400-million compared to the 2019 level.
Centerra Gold Inc. (CG-T) slipped 11.4 per cent on news it is halting operations at its Kumtor gold mine in the Kyrgyz Republic, after two employees went missing following a “significant rock movement,” at the open pit mine.
Toronto-based Centerra has evacuated all personnel from the site and is conducting a search-and-rescue operation in conjunction with the Kyrgyz Republic Ministry of Emergencies.
- Niall McGee
Just Energy Group Inc. (JE-T) fell 15.8 per cent as it announced that it has amended its senior secured credit facility to increase the senior debt to EBITDA covenant ratio from 1.50:1 to 2.00:1 for the third quarter of fiscal 2020.
It has also amended the covenants on its senior unsecured term loan facility to increase the senior debt to EBITDA covenant ratio from 1.65:1 to 2.15:1 for the third quarter of fiscal 2020. “Both changes are effective only for the third quarter of Fiscal 2020 and the covenants will revert to the prior levels following December 31, 2019,” the company stated.
In connection with the amendments, the company said it's immediately suspending dividends on the Series A preferred shares. However, it says those dividends will continue to accrue during the suspension period. "Any dividend payment following the suspended period will be credited against the earliest accumulated but unpaid dividend," the company stated.
The company also said its previously announced strategic review “remains active and is progressing.”
U.S. retail stocks were mixed on Cyber Monday as they seek to sustain the momentum of a record US$11.6-billion in online sales on Thanksgiving and Black Friday.
Estimates from Adobe Analytics on Sunday predicted the opening weekend of U.S. retailers’ crucial holiday season would set a new record of almost US$30-billion in sales, with Cyber Monday – now traditionally the U.S. economy’s biggest online shopping day – alone expected to reach US$9.4-billion.
With files from Brenda Bouw, staff and wires