TSX and miners endure tough period

The PDAC effect – a boost to mining stocks which is said to follow the massive convention in Toronto — didn’t last long this year as miners fell with the rest of the market during a disappointing March 7-11 period. In all the TSX Composite Index was off 629 points to finish up at 13,674 points.

The sell-off was tied to jittery markets the world over, and came despite Canada showing decent housing start numbers and a merchandise trade surplus for a second straight month. And while employment numbers disappointed somewhat, 15,000 jobs were still added in February and the unemployment rate was stable at 7.8%.

Despite increased worry over the situation in the middle-east, gold failed continue to attract investment inflows as the metals recent strong run came to an end with a US$26 correction. The metal finished the period at US$1,411.50 and its loss was mirrored by the Global Gold Index as it shed 20 points to finish up at 384.21 points.

The diversified miners represented in the Capped Metals & Mining Index didn’t fare any better, as the Index was off 114 points to finish at 1,356.75 points. That fall came as the prices for copper, aluminum, nickel, tin, lead and zinc were all lower.

Nuinsco Resources received a nasty tax bill from the Canada Revenue Agency (CRA) and watched its shares fall shortly thereafter. The company released the news after markets closed on Friday March 4, but its shares began to fall when markets opened up on Monday. In total Nuinsco shares were off 25% for the period as they finished at 18¢. The company says CRA is now charging the company $4.4 million for transactions completed in 2006. Nuinsco says it plans to vigorously defend what it and its counsel believe to have been a correct filing position related to these transactions.

Despite attracting a new investor, Diamond Fields International shares dropped 19% for the period finishing at 25¢. The decline coincided with word that Jean-Raymond Boulle’s Spirit Resources is looking to increase its interest in the company. Spirit, which is a privately held company controlled by Boulle, said it will look to acquire more shares of Diamond Fields through ordinary market purchase. The company said it could take as much as an additional 5% interest in the company. Boulle and Spirit currently control roughly 30% of DFI’s commons shares.

 But there were still a few positive stories in the mining sector over the period, one of which was Tiger Resources. The company is showing that the Democratic Republic of the Congo is still the place to find world class copper deposits, despite the political risk associated with the country. Drill results from Tiger’s Sase project in the DRC helped the company carve out a 10% gain, moving up to 54¢. That boost came thanks to results that were highlighted by 28 metres grading 4.13% copper and 75 metres grading 5.94% copper.