TSX up in Feb.28 to March 4 period after stumble

The TSX composite index rose 200.65 points in the Feb. 28 to March 4 period to recover from its late February dip and end at 14,252.77 points. The capped metals and mining index managed to gain 25.71 points to end at 1,463.86, its first period gains since falling from a near 1,600-point-high in early February. The overall gains led to 46 TSX-listed companies hitting 52-week highs while 11 hit new lows.

Canada Lithium had a hectic week after announcing it had arranged for an independent review of the resource estimate for its Quebec Lithium project. The external review was prompted by an internal review that showed an apparent reduction in all resource categories compared with the compliant resource. The company halted trading on Feb. 28 to announce the news while trading at $1.35 and its share price dropped 63¢ over two days once trading resumed. The company’s share price recovered somewhat to end at 99¢ after it issued a second, more detailed release. All the attention had the company easily become the most-traded company with 77.6 million shares traded. In January the Canada Lithium completed a $110 million financing at $1.50.

 Lundin Mining and Equinox Minerals took second and third place in trading volumes after Equinox made its surprise bid for Lundin, possibly disrupting the proposed Lundin-Inmet Mining merger already in the works. Lundin saw 61.6 million shares traded while Equinox came in at 52.2 million. The market responded by boosting Lundin’s share price by $1.45 and dropping Equinox’s share price 51¢ to $5.76. Equinox is offering $8.10 in cash or 1.2903 Equinox shares plus a penny for each Lundin share for what Equinox figured was a 26% premium, while the Lundin-Inmet is billed as an all-share merger of equals. A special shareholder meeting for the Lundin-Inmet deal has been pushed back until March 28.

In another snag for Inmet, the company dropped $5.12 on the last day of the period or $3.30 over the whole period to end at $64 after news broke that the Panamanian government would be repealing the recently enacted Law 8. The law, repealed after significant opposition, modified the country’s mining code. The company made assurances that its sizable Cobre Panama copper-gold-moly project falls under Law 9 and is therefore not affected by the repeal. Law 8 does, however, deal with foreign government ownership of Panamanian mining concessions, which could affect Inmet’s plans to have Singapore’s Temasek and Korea Resources help fund the US$4.3 billion project. Inmet stated that it is seeking clarification on the matter and has alternative funding options.

In silver news, Coeur D’Alene Mines gained $6.56 to end at $33.67 after reporting a record quarter and a positive 2011 outlook. The company reported a 75% increase in metal sales for the quarter to US$208 million and a 72% increase in overall 2010 sales to US$515 million. Coeur had a net loss of US$91.3 million in 2010 and US$9.9 million in the fourth quarter, while adjusted earnings were US$34.3 million for the year and US$49.9 million for the quarter. Going into 2011, the company expects its first full year of production from all three of its silver mines, which will give it production of 20 million oz. silver and 250,000 oz. gold.