Toronto Stock Exchange

The S&P/TSX Composite Index went into the Labour Day weekend on a downturn as it shed 148 points to 11,949.26 for the period.

The slump came with markets trying to decipher U.S. Federal Reserve Chairman Ben Bernanke’s position on further quantitative easing. Speaking in Jackson Hole, Wyo., Bernanke wasn’t clear on whether markets could expect another round of quantitative easing, although he didn’t elminate the possibility.

Markets were disappointed by the lack of clarity, and also had to digest word that consumer confidence was falling against stronger real-estate prices south of the border.

Gold held its own in the meanwhile, and the metal was up US$14 to US$1,687.60 per oz. The move did little to help miners, though, and the S&P/TSX Global Gold Index stayed flat at 314 points.

The diversified miners must have been envious of their cousins in the gold camp for just being able to hold water. The S&P/TSX Capped Diversified Metals & Mining Index fell 35 points to 825.64 over the period, while the price of copper fell US2¢ to US$3.46 per lb.

Peregrine Diamonds was one of the period’s biggest gainers, with investors anticipating positive news. The company is in advanced discussions regarding its corporate and financing options, but said the parties involved are bound by confidentiality and released no details of possible deals. Peregrine has diamond exploration projects in Canada’s Far North. The company’s shares were up 52% to 50¢ for the period.

Inter-Citic Minerals also saw gains in its stock after saying it was being acquired by a subsidiary of China-based Western Mining Group in a deal that values Inter-Citic at $250 million. Western Mining is offering $2.05 per share in cash for all outstanding shares of Inter-Citic, which is developing the Dachang gold project in China. The offer represents a 41% premium and helped boost Inter-Citic shares by 34%, to $1.95 for the period.

The news wasn’t so good for Eco Oro Minerals, which saw its market cap nearly cut in half. Shares were was off 42% to $1.14 after the company was denied an extension to concessions that make up over half of its gold project in Colombia. The Colombian national mining agency didn’t extend the rights to 54% of its ground because it says it’s located in an environmentally sensitive paramo ecosystem. The ground Eco Oro is losing holds roughly 70% of the gold deposit. Eco Oro, formerly known as Greystar Resources, has been struggling to develop its Angostura project for more than 17 years. The company is arguing that the mining agency missed a deadline on its request for an extension to an existing concession, and has no authority to make the ruling. It also says the agency made a mistake in determining which areas around the paramo are eligible for mining.

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