A late surge helped the TSX Composite Index end the Jan. 17-23 report period in the black, while the rest of the country ended in blue, with the Conservative Party emerging from the Jan. 23 federal election with a minority mandate. The benchmark index climbed 12.4 points to another record close of 11,733.37.
Canada’s gold miners suffered a sell-off, as the bullion price slipped US$7.25 per oz. to US$554.50 in London. The gold index fell 6.74 points to 275.92.
Eldorado Gold saw the most action, slipping 82, or 13%, to $5.36 on volume of 45 million shares. Proceeds of a recently arranged $162-million bought-deal equity financing led by Orion Securities will go toward the acquisition of advanced gold projects in China, and development of projects in Turkey and Brazil. The underwriters can buy another 4.5 million shares for $24.3 million.
Newlyweds Barrick Gold and Placer Dome were next in line, with each trading more than 30 million shares. Barrick recently took control of Placer’s board after acquiring 81% of its older rival’s shares. Barrick has extended its friendly takeover bid to Feb. 3, and will compulsorily acquire Placer’s remaining shares once it reaches the required 90% level. Barrick dropped 72 to $34.53, while Placer fell 98 to $27.68.
Bema Gold took a breather from its recent ascent to end 17 cheaper at $4.35 on 25.8 million shares. Bema may stand to benefit from Barrick’s acquisition of Placer, as Barrick CEO Greg Wilkins previously said his company would take a fresh look at the Cerro Casale copper-gold project in Chile. Late last year, Placer said the project was “not financially viable at this time.” Barrick envisages some synergies with its existing operations in Chile.
Sticking with consolidation news, shares in Adastra Minerals jumped 55, or 30%, to $2.35, after First Quantum Minerals launched an all-stock, $189.3-million takeover bid. Adastra calls the “opportunistic offer” significantly undervalued. First Quantum finished off 95 lower at $37.70. At that price, First Quantum’s bid values Adastra’s shares at $2.15 apiece. Adastra owns 65% of the Kolwezi tailings project in the Democratic Republic of the Congo — one of the world’s largest cobalt resources.
Other impressive percentage advances were put in by: African Copper, up 26% to $1.70 on some high-grade drill results from the Dukwe copper project in Botswana; Swedish miner Boliden, advancing 26% to $13.80, after it more than quadrupled pretax fourth-quarter profits; Constellation Copper grew by 24% to $1.99 after it began commissioning of a solvent extraction-electrowinning plant at the Lisbon Valley mine in Utah (copper-rich solution is already flowing from the leach pad); and Goldstake Explorations, rose 22% to 14 after trenching on the Instant Pond zone, near Kirkland Lake, Ont., yielded copper and visible gold.
The TSX’s diversified miners added 7.56 points to make 410.95, as base metal prices advanced across the board. Zinc prices reached record territory thanks to strike concerns in Peru and Mexico. Teck Cominco, the world’s largest zinc producer, rose $3.60 to $68.30. Other zinc issues on the rise were South Atlantic Ventures, plus $1.80 to $22.60, and European Goldfields, which gained 49 to $3.05.
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