Market news

Toronto Stock Exchange

Fears over whether Greece would meet austerity requirements set by the European Union (EU) meant the risk-free trade was back on. That piled investors into U.S. treasuries and sent both the Canadian dollar and the S&P/TSX Composite Index lower.

 The EU set strict measures for Greece to receive its latest bailout funds, and as investors fretted over the consequences of a potential default the Composite dropped 158 points to 12,389.42 points for the Feb. 6–10 period. 

With treasuries being the preferred safe haven, gold prices fell US$6 to US$1,725.30, and took gold miners along for the ride. The S&P/TSX Global Gold Index fell 9 points to finish up at the 374.15-point level. 

As investors left the global growth story, diversified miners fell too and the Capped Metals & Mining Index was down 58 points to 1,171.60 as nickel, lead and zinc prices were lower, while copper, aluminum, and tin prices were slightly higher. 

Oops. Nevsun Resources had to tell the market that it has a lot less gold in one of its deposits than believed. The company said that owing to reduced reserves at its Bisha gold mine in Eritrea, production at the mine is set to fall as much as 50% this year. The news rattled investors and the company’s share price dropped 17% to $4. The trouble comes from the Main zone at Bisha, where Nevsun overstated reserves by mistaking waste rock for gold-bearing ore.

Horizonte Minerals had better news for investors after closing a deal to acquire the Vila Oito and Floresta nickel laterite projects in Brazil. The projects were bought from Lara Exploration for 8.5 million new shares worth $2 million. Up 63% to 26¢, company shares were the period’s largest gainers by percentage points. 

It was a big week for Yukon-Nevada Gold as well. The company announced it was restarting production at its Jerritt Canyon gold mine in northeast Nevada, which was shut down in early January so that the company could complete a winterization and refurbishment program. A few days after the announcement Yukon-Nevada said it had secured $20 million to expand the mine. The money comes from a gold hedge with Deutsche Bank on 27,950 oz. gold, or 4% of its gold reserves. The company’s shares were up 30% to 39¢ for the period. 

Rio Novo Gold saw its share price fall by 21% to 70¢ after updating its exploration program at the Toldafria project in central Colombia’s gold-rich Middle Cauca belt. While it says its channel sample results outline both high-grade sheeted vein zones and stockworks, the market didn’t rally despite a highlight assay of 32 metres grading 15.77 grams gold. 

The company also announced it had raised $20 million in a bought deal for 26.7 million units at 75¢ per unit.

TSX most active issues

VOLUMEWEEK

(000s)HIGHLOWCLOSECHANGE

Grande Cache CGCE234579.919.329.88+0.52

Lake Shore GldLSG232521.641.331.54+0.13

Kinross GoldK2098811.2310.6410.79-0.35

Lundin MngLUN169455.374.985.03-0.27

Uranium OneUUU163412.852.612.76+0.11

Teck BTCKB1546043.2539.1340.24-3.16

Yukon-Nev GoldYNG140410.470.310.39+0.09

Orbite AlumnaeORT137772.781.882.26-0.50

Torex GoldTXG135212.141.972.05-0.09

Eldorado GoldELD1122714.7213.4713.53-1.11

TSX greatest percentage change

VOLUMEWEEK

(000s)HIGHLOWCLOSECHANGE

Horizonte MnlsHZM7000.260.240.26+62.5

Talon MetalsTLO14570.850.470.67+36.7

CaNickel MngCML15350.050.030.04+33.3

Yukon-Nev GoldYNG140410.470.310.39+30.0

Red Cresc ResRCB850.190.160.19+26.6

CIC EnergyELC28551.330.770.99+23.7

Polar Star MngPSR2160.460.380.43+22.8

Corona GoldCRG2610.780.640.75+19.0

St AugustineSAU41250.440.310.38+18.7

Eco Oro MnlsEOM4692.211.792.21+18.1

Nevsun ResNSU102606.473.914.00-37.6

Chieftain MtlsCFB374.753.603.60-24.2

Rio Novo GoldRN8390.900.690.70-21.3

Lipari EnergyLIP650.600.460.48-21.3

Orbite AlumnaeORT137772.781.882.26-18.1

Rare Elemnt RsRES7847.666.226.38-17.3

White Tigr GldWTG17060.900.690.72-17.2

Nuinsco ResNWI5890.120.100.10-16.6

Homeland EnrgyHEG7620.060.050.05-16.6

PolyMet MngPOM1601.361.131.16-15.3

TSX greatest value change

WEEK

VOLUMECLOSECHANGE

Centerra GoldCG172500119.70+1.03

WitwatersrandWGR968715.84+0.76

Franco-NevadaFNV306126044.40+0.69

Altius MnrlsALS12453812.00+0.69

Virginia MinesVGQ1238859.75+0.60

Grande Cache CGCE234572639.88+0.52

Royal Cdn MintMNT208347119.93+0.48

Foraco IntlFAR1338604.39+0.43

Horizns G BearHGD16999038.58+0.43

Eco Oro MnlsEOM4694302.21+0.34

Walter EnergyWLT1731170.70-4.90

Teck BTCKB1546030340.24-3.16

Teck ATCKA2648041.51-2.78

Royal GoldRGL3504270.27-2.54

Nevsun ResNSU102603854.00-2.42

First QuantumFM696181721.28-2.15

Potash Cp SaskPOT925850944.84-1.81

Detour GoldDGC206728327.25-1.50

Inmet MiningIMN134468468.02-1.41

Agnico-EagleAEM388772034.75-1.35

TSX Venture Exchange

The S&P/TSX Venture Composite Index saw its first week of decline since mid-December, dropping 11.56 points to 1,653.55 as questions about the Greek debt deal weighed on markets. The uncertainty led to hesitant trading, with the index moving little, and trading volumes down as well. The average daily volume came in at 111 million shares traded daily, a drop of 24 million shares compared with the week before.

Bucking the trend was Nevada Sunrise Gold with 15.5 million shares traded as it ended up 6¢ to 15¢ after its option partner struck high-grade gold on its property. The company owns the Kinsley Mountain project in Nevada in which Pilot Gold is working to earn a majority stake, believing the project bears a resemblance to the Long Canyon deposit. Pilot’s first drill results from the project included 18 metres grading 5.91 grams gold per tonne and 8 metres averaging 6.75 grams gold. 

Roxgold saw significant activity with 13.6 million shares traded as it hit a brief 52-week high of $2.14 before settling with a 5¢ gain at $2.05. The company announced more impressive intercepts from its Yaramoko gold project in Burkina Faso, including 7 metres grading 60.5 grams gold, 25 metres averaging 14.74 grams gold and 2 metres averaging 43.97 grams gold. While riding near its 52-week high the company announced a $25.9-million financing,  selling shares at $1.85 each.

Great Quest Metals continued a February recovery, climbing 63¢ over six days of gains. Of that, 35¢ was in the most recent period, making Great Quest the week’s biggest value gainer. The climb followed losses around the time the company released results from its Tilemsi phosphate project in Mali on Feb. 1. Results from the phase two program included bulk sampling that showed a 21% grade increase compared to drill holes, but with narrower intercepts. 

Aurcana rose 15¢ on 14.3 million shares traded on no news. In mid-January the company anounced that its La Negra mine produced a million oz. silver in 2011, or 1.7 million oz. silver equivalent, and updated construction of its Shafter mine. Silver has gone from US$29 per oz.
at the start of 2012 to just under US$34 per oz. in February. 

Verde Potash continued a steep decline following the release of financials related to its conventional potash operation and a change of priorities. The company released a preliminary economic assessment on its Cerrado Verde project on Jan. 31 that outlined a US$2.3 billion after-tax net present value and a 24% internal rate of return for a 3-million-tonne-per-year operation. Verde also announced it was suspending development work on its Thermopotash project and concentrating efforts on the conventional potash project. Since then the company’s share price has dropped from $8.56 to $6.45, with a 51¢ drop in the latest period.

TSX-V most active issues

VOLUMEWEEK

(000s)HIGHLOWCLOSECHANGE

Nevada SunriseNEV155310.200.090.15+0.06

Aurcana CorpAUN143130.920.720.88+0.15

RoxgoldROG135742.141.902.05+0.05

Canadn OrebodsCO121150.370.280.28-0.02

Encanto PotashEPO113740.370.310.34+0.05

Calibre MngCXB112970.630.510.58+0.04

RPT UraniumRPT112510.090.070.08+0.01

Molycor GoldMOR99190.060.040.06+0.01

Goldbrook VentGBK69280.380.380.380.00

Royal CoalRDA69040.050.040.040.00

TSX-V greatest percentage change

VOLUMEWEEK

(000s)HIGHLOWCLOSECHANGE

First Star ResFS30600.060.030.04+300.0

Senator MinlsSNR1040.060.030.05+150.0

IEMR ResIRI230.220.110.20+81.8

Nevada SunriseNEV155310.200.090.15+66.6

Aurvista GoldAVA3500.330.200.33+65.0

Sable ResSAE610.140.100.14+55.5

Central Iron OCIO9550.120.070.09+50.0

Tawsho MngTAW610.300.280.30+50.0

Manicouagan MlMAM5430.180.120.18+50.0

Dajin ResDJI9670.090.050.09+50.0

Kenieba GoldfKEN1850.060.050.05-44.4

Petromin ResPTR920.060.050.05-37.5

MGold ResMNI2900.090.080.09-35.7

RT MineralsRTM3490.100.060.06-33.3

Solid ResSRW9010.090.060.06-33.3

Newton GoldNWG2140.160.120.12-29.4

Endurance GoldEDG1400.080.050.05-28.5

REBgoldRBG860.050.040.05-28.5

Moss Lake GldMOK880.290.210.22-26.6

Dianor ResDOR3650.040.030.03-25.0

TSX-V greatest value change

WEEK

VOLUMECLOSECHANGE

Great Quest MeGQ1557922.45+0.35

Atacama Pac GdATM7995554.10+0.25

Prophecy PlatNKL9474773.92+0.24

Olivut ResOLV6909021.75+0.24

Pac Booker MinBKM201808.50+0.24

Northern GraphNGC36710911.70+0.20

Tirex ResTXX8863830.89+0.19

WCB ResWCB1867000.88+0.18

Afferro MngAFF193801.26+0.15

Aurcana CorpAUN143128940.88+0.15

Verde PotashNPK5575516.45-0.51

Anfield NickelANF6087874.40-0.42

Maudore MinlsMAO521494.84-0.41

Chesapeake GldCKG1339759.84-0.34

Batero GoldBAT8367492.44-0.30

Probe MinesPRB8508492.01-0.27

Abitibi RoyaltRZZ275031.20-0.25

Atac ResATC12601443.25-0.22

IMPACT SilverIPT4436891.63-0.18

Newstrike CapNES7360612.95-0.18

U.S. Markets

Despite some signs of economic recovery in the U.S., broader fears that Greece’s parliament would not approve the stricter financial reforms to qualify for more bailout funds dampened U.S. equities in the week. The Dow Jones Industrial Average slipped 0.5%, or 61 points, to 12,801.23, while the S&P 500 Index lost 0.2%, or 2.26 points, to finish at 1,342.64. The Philadelphia Gold and Silver Index dropped 5.63 points, or 2.8%, to 194.71 and the New York spot price for gold fell US$3.80 per oz. to close the week at US$1,722.10 per oz. 

Harmony Gold topped the list of companies with the largest gain in value, advancing 49¢ to US$12.90. The company reported record operating profits of US$257 million in the second quarter of fiscal 2012. Gold production of 344,592 oz. represented a 5% increase over its first-quarter production with recovery grades climbing by 13% to 2.36 grams gold per tonne. Cash operating costs fell by 6% to US$958 per oz. gold.

News of a merger between Eurasian Minerals and Bullion Monarch sent the latter’s shares up 31¢ to US$1.09. Under the deal announced on Feb. 7, Eurasian will acquire all of the outstanding common shares of Bullion Monarch in a cash and stock deal worth US$45.8 million. Bullion shareholders will receive 0.45 of a Eurasian share and 11¢ in cash for each Bullion share held. The price represents a 64% premium. If the transaction is completed, the combined company will have more than 145 properties on five continents. 

A royalty and equity investment agreement between Lake Shore Gold and Franco-Nevada pushed the share prices of both companies up a bit. Under the agreement Franco-Nevada will pay Lake Shore US$35 million for a 2.25% net smelter return royalty on mineral sales from the company’s Timmins West complex. Franco-Nevada also will spend $15 million in a private placement to acquire 10.05 million common shares of Lake Shore Gold at $1.49 per share — a 5% premium to Lake Shore’s 10-day volume weighted average price. Franco-Nevada’s shares ended the Feb. 6–10 trading week at US$44.27 per share, up 30¢, while Lake Shore’s shares climbed 9¢ to US$1.52.

U.S. most active issues

VOLUMEWEEK

(000s)HIGHLOWCLOSECHANGE

Alcoa*AA11225910.9210.2210.29-0.47

Freeport McMo*FCX7519947.2844.4044.94-1.54

Alpha Nat Res*ANR6220623.6820.8521.04-1.74

Arch Coal*ACI4859515.8114.3314.39-1.31

Kinross Gold*KGC4113911.3210.6110.78-0.42

Barrick Gold*ABX2891850.0047.7148.15-0.92

Potash C Sask*POT2833847.1244.4244.70-2.23

Peabody Enrgy*BTU2486238.9635.6435.77-2.14

NovaGold Res*NG243559.258.228.48-0.67

Silver Wheatn*SLW2144336.6934.5635.56-0.40

U.S. greatest percentage change

VOLUMEWEEK

(000s)HIGHLOWCLOSECHANGE

Tombstone Exp*TMBXF1910.050.040.05+66.6

Fischer-W Gld*FWGO2420.040.020.03+50.0

Li3 Energy*LIEG13550.140.090.14+40.0

Bullion Monar*BULM11581.140.621.09+39.7

Douglas Lk Ml*DLKM16280.160.090.12+33.3

America West*AWSR910.500.240.30+20.0

Crosshair Eny*CXZ2250.670.510.61+19.6

Lake Vict Mng*LVCA160.100.090.10+11.1

Legend Intl H*LGDI31170.120.100.11+10.0

Radius Gold*RDUFF450.370.300.36+9.0

Nevsun Res*NSU133356.493.904.00-38.0

Starfield Res*SRFDF690.030.010.02-33.3

Linux Gold*LNXGF800.040.030.04-20.0

Rare Elemt Re*REE87807.656.216.32-18.8

Dejour Enterp*DEJ3260.490.410.41-16.3

PolyMet Mng*PLM13971.371.121.15-16.0

Miranda Gold*MRDDF1300.480.360.38-15.5

Mechel*MTL304312.1510.5310.68-13.6

Rubicon Mnls*RBY44394.123.783.80-11.8

Silvercorp Mt*SVM14868.287.107.16-11.5

U.S. greatest value change

WEEK

VOLUMECLOSECHANGE

Harmony Gold*HMY1187971112.90+0.49

Bullion Monar*BULM11580671.09+0.31

Franco-Nevada*FNV99239744.27+0.30

Alum Cp China*ACH69438613.15+0.27

MDU Res*MDU246639921.70+0.15

Avino Silver*ASM1841501.86+0.10

Crosshair Eny*CXZ2254120.61+0.10

Denison Mines*DNN6229871.86+0.09

Lake Shore Gd*LSG18424661.52+0.09

Gold Reserve*GRZ1347542.93+0.06

Walter Energy*WLT197554970.51-5.70

BHP Billi-BBL*BBL639483664.68-5.28

BHP Billi-BHP*BHP1462159577.10-5.05

Alliance Rs P*ARLP47481773.06-4
.41

Randgold Res*GOLD3019123112.57-3.60

Teck B*TCK1678061640.19-3.49

Rio Tinto*RIO289110559.33-3.37

Royal Gold*RGLD323909870.39-3.11

Molycorp*MCP1883725326.68-3.09

Mosaic*MOS1720487854.42-2.99