Katrina spins TSX higher

With oil prices surging from reduced production from the Gulf of Mexico in the wake of hurricane Katrina, the resource-laden S&P/TSX Composite Index reversed course to end the Aug. 23-29 report period 108.37 points better at 10,558.40. The gold index continued 2.55 points lower to 199.68, as the yellow metal dropped another US$3.10 per oz. to US$436.75 in holiday-shortened trading in London. The diversified miners lost another 3.9 points to 325.65.

Toronto’s mining stocks were led by off-index HudBay Minerals, which saw more than 11.2 million shares trade 39 higher to $3.43. The zinc and copper producer was recently the subject of a favourable research report by Wellington West Capital Markets, in which a target price of $4.50 was offered.

Dynatec was close behind, gaining 3 to $1.50 on around 9.8 million shares. Recent drilling by partner FNX Mining has expanded the pair’s Footwall discovery near Sudbury, Ont., to 153 metres along strike. It remains open in all directions, except to the west where it appears to thin. FNX owns 75% of the joint venture, with Dynatec holding the remainder. For its part FNX gained $1.60, or 13%, to reach $13.95.

EuroZinc Mining broke even at 82 after retiring a US$48-million loan for the purchase of the price-participation rights to the Neves-Corvo copper mine in Portugal some ten months early. Some 9.2 million shares crossed the floor; enough for third spot among the most actively traded miners.

River Gold Mines put in the biggest percentage increase, jumping 23, or 22.5%, to $1.25. River’s second quarter loss widened to $5.4 million on soaring cash costs. Work continues on a previously announced business combination with Venture Exchange-listed Wesdome Gold Mines.

Not to be outdone, Exall Resources surged 4.5, or nearly 19%, to 28.5; the shares were up another 15.5 at 44 in late-afternoon trading on Aug. 30. Recent drilling on the Gold Eagle mine in Red Lake, Ont., is highlighted by 11.7 metres running 28.5 grams gold. Venture-listed Southern Star Resources owns a 50% stake. The Canada Revenue Agency is expected to rule on Exall’s plan to spin off its gold and mining assets by the end of September.

Timminco was the biggest percentage loser, falling 14, or 22%, to 50. The company’s second quarter net loss doubled from a year ago to $3 million on poor magnesium sales. Other losers were: YGC Resources, off 20% at 63; Candente Resources, down 17% at 60; and Golden Queen Mining, 16% lower at 31. Nuinsco Resources, Farallon Resources and Canadian Zinc all fell about 12% to 17.5, 49, and 43, respectively.

YGC has optioned off up to a 51% stake in its Money property in the Yukon to Yukon Zinc for a total of $715,000 in cash and exploration spending. The property is immediately east of Yukon’s Wolverine deposit, and hosts a copper-rich massive sulphide occurrence. Candente suffered profit-taking after a successful round of drilling on its Canariaco property in Peru. Farallon plans to merge with Venture-listed Continuum Resources, with the pair’s Mexican projects housed under the Farallon banner.