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Gold Summary for Dec. 18, 2014

2014-12-18 21:00 ET - Market Summary

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by Stockwatch Business Reporter

New York spot gold closed up $9 to $1,197.90 Thursday, rising as the Russian ruble continued to fall and investors continued to digest the U.S. Federal Reserve's decision to keep interest rates low for considerable time. In Canada, the TSX Venture Exchange added 6.50 points to 665.50 and the TSX Gold Index added 6.07 points to 147.77.

Canada's larger gold miners followed bullion higher. Goldcorp Inc. (G) gained 94 cents to $21.84, Alamos Gold Corp. (AGI) rose 23 cents to $8.46, Iamgold Corp. (IMG) rose 19 cents to $3.01 and Barrick Gold Corp. (ABX) climbed 27 cents to $12.85.

Barrick, which has tumbled from $23.50 in February, will have to suspend production at its Lumwana copper mine in Zambia next year. On Jan. 1, 2015, the Zambian government plans to start helping itself to 20 per cent of Lumwana's gross mine revenue, up from six per cent previously. Barrick says Lumwana cannot support this gross royalty at current copper prices ($2.86 a pound; Lumwana cash costs are $1.80 a pound). Lumwana has been a disappointment since Barrick acquired it in 2011, paying $7-billion for its owner, Equinox Minerals Ltd., at the top of the market. The company put the Zambian mine up for sale earlier this year, but has yet to find any takers. It is even less likely to find one with this royalty increase. Barrick anticipates a $1-billion writedown for its fourth quarter. Lumwana's fate is not that surprising; production has consistently failed to miss targets and the company attributed its most recent troubles (in the third quarter) to a conveyor collapse and severe rain.

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