TSX rides silver and gold higher

Silver and gold were the theme of the holiday shortened Apr 18 -21 period, and the strength of the two metals helped ensure that the TSX Composite Index would finish higher than where it began. The Index managed a gain of 234 points to move up to 13,972 points for the period.

Despite a highly touted report from Goldman Sachs warning of a pullback in gold prices, the yellow metal shrugged off all naysayers and surged to a historic mark as it broke through the US$1,500 per oz. barrier. The metal finished the period selling for US$1,504, which was US$16 higher than where it began. The Global Gold Index tracked the metal higher as it was up 15 points to 412.62 points. Silver also reached lofty heights as it broke above the US$45 per oz. mark and finished at US$46.26.

The Capped Metals & Mining Index also rose for the period as it gained 70 points to finish at 1,477.36. That gain came on the back of stronger copper, aluminum and tin prices. Nickel, lead and zinc prices, however, were all slightly lower.

With all the strength in commodity prices it should come as little surprise that the Canadian dollar continued to find favor with currency investors. The Loonie made a new three-and-a half year high of US$1.05. Beyond commodity prices, a weaker greenback and strong economic data suggesting future rate hikes were seen as the key drivers behind the currency’s surge.

MagIndustries was the period’s biggest winner in terms of percentage gain. The company’s shares jumped 47% for the period to finish at 22¢. The spike came thanks to investment dollars from China, as Evergreen Industries, a diversified industrial company based in Shanghai, made a friendly, all cash, $115 million take-over offer which will give shareholders 25¢ per share. MagIndustries has been developing potash assets in the Republic of Congo.

Next on the list of largest gains by percentage were shares of Banro, which also benefited from the interest of the Chinese. The junior gold company with operations in the Democratic Republic of the Congo had the markets buzzing after a document claiming to be from management, hinted at a high-level deal in the works. Although Banro flatly denied the document came from its management team its shares still began to climb steeply. Just days later the company announced that it had entered into a memorandum of understanding with China Gold, a TSX listed company that the Chinese government has a significant stake in, to jointly develop its properties in the eastern DRC. Banro shares were up 30% for the period to $3.51.

Mandalay Resources also made significant gains over the period. The company’s shares were up 23% to 87¢ on the heels of an updated resource estimate that replaces all of the depleted reserves at its Costerfield gold-antimony mine in Victoria, Australia. The estimate extends the reserve life of the mine well into 2012 and shows that mineralization extends at depth. Those deeper zones will be tested as part of its 2011 drill program the company says.