TSX participants balance gyrations in gold, loonie and greenback

The TSX Composite Index was up a modest 14 points to finish the Sept 20-24 period at 12,204.86.

The big story of the week was the Canadian dollar’s failure to rise despite a weakening U.S. greenback. While most major currencies appreciated against the US dollar, fears that the Canadian economy may be too tied to the slumping American economy was seen as the culprit. Economic growth in Canada is on track for less than inspiring 1.0-1.5% for the third quarter.

Despite gold’s continuous march towards new heights, the Global Gold index was pretty much flat for the period as it moved up just 0.44 points to finish at 399.62.

The metal itself, however, finished the period trading for US$1,297.00 – up roughly US$17.00 for the period.

The Capped Metals & Mining index carved out a modest gain of 72 points to finish the period at 1,116.40 as the price of copper and aluminum rose while nickel fell and tin prices were flat. Zinc and lead were up as they both broke through the US$1.00 per lb level.

Word of a take-over bid for Baffinland Iron Mines had its shares climbing. The company was up 84% to $1.03 after announcing that Nunavut Iron Ore Acquisition, a subsidiary of Australian-based Iron Ore Holdings had made an offer of 80 cents per share.

Baffinland’s board is reviewing the offer although the company did note that the offer is not a classified as a “permitted bid” under its shareholder rights plan. Baffinland is exploring and developing iron ore deposits at its Mary River Property on Baffin Island in Nunavut.

Minera Andes settled its legal dispute with its joint venture partner at an Argentinean gold and silver mine and saw its shares climb as a result. The company finished the period roughly 33% higher at $1.46 after announcing it had come to terms with Hochschild Mining at the jointly held San Jose mine.

The two companies had been arguing over how cashflows from the mine would be distributed with Minera Andes wanting the money to go towards a loan it made to the joint venture while Hochschild wanted the money to go towards a project financing loan it arranged first. The deal will see cashflows split between the two loans.

Mongolia offered some optimism for embattled Khan Resources during the period, and the company’s shares shot up 32% to 41 cents.

The good news came in the form of the Mongolia Nuclear Energy Agency’s (NEA) failure to appeal a court ruling which said that the NEA’s invalidation of exploration licenses on the company’s Dornod uranium property were illegal.

Khan, however, is not out of the woods yet. A separate and earlier court ruling that also called the NEA’s actions illegal is still under appeal by the agency. That appeal should be heard in late September.

Staying with Khan, the company said it filed a $300-million lawsuit with the Ontario Superior Court against the Russian state controlled uranium miner, Atomredmetzoloto, for its “continuing efforts to secure Khan’s rights to the Dornod uranium project.”