TSX catches the QE3 wave

The next round of quantitative easing (QE) finally came and it was good news for commodity prices and the commodity heavy TSX Composite Index, which grew by 242 points to 12,499.47 points for the Sept. 10-14 period.

The announcement of a third round of QE pushed gold to a 7-month high as it touched $1,775 per oz. on Thursday before settling back and closing out the period at US$1,772.70 per oz. — a US$34 increase over where it was to start the period. The move helped miners as evidenced by the Global Gold Index climbing 19 points to finish at 346.28 points.

Some key details of the Feds announcement were that, unlike prior rounds of QE, this time purchases will be open-ended, meaning the Fed will keep buying mortgage-backed securities until economic growth is evident. It also said that near-zero interest rates will be extended until mid-2015.

The news was also good for diversified miners and the Capped Metals & Mining Index was up 82 points to 997.20 points as copper prices rose by 19¢ to $3.83 per lb.

But even a stronger gold environment couldn’t stave off the sellers of Great Basin Gold’s stock. The company’s fortunes continued to flounder as it lost another 67% of its market cap, with its shares closing out the period trading for just 8¢. Great Basin shares have fallen 95% over the past year with the latest drop coming after the Toronto Stock Exchange put it under delisting review. Great Basin suspended operations at its Burnstone gold mine in South Africa due to a lack of funds but needs to raise $30 million to $40 million to cover Burnstone’s immediate closure costs. The TSX said the company has 30 days to get into compliance with its listing requirements.

Aureus Mining found a way to capitalize on investor enthusiasm for the yellow metal. The Liberia-focused gold explorer discovered three mineralized zones at its Ndablama project in the country with each zone hosting multiple, high and low grade results. The drill returned grades ranging from 1.1 to 7.6 grams per tonne with widths of 2.2 to 19 metres. Aureus shares were up 34% to $1.23

More signs that it was moving towards production was enough to lift Curis Resources’ fortunes. The company’s share price grew by 57% to 77¢ after it announced two key hirings to help develop its Florence Copper project in Arizona. Bruce Marsh, an engineer that has worked for Freeport-McMoRan Copper & Gold and Rio Tinto, is coming on board as senior vice-president of corporate development while 14-year industry veteran Greg Phillips was named process superintendent.

And while strikes continue in South Africa’s Bushveld complex, Platinum Group Metals saw its share price rise on drill results from its Waterberg project in the area. The latest drilling expanded a new discovery area of layered mineralization outside of the inferred resources of 6.6 million ounces. The company’s shares were up 27% to $1.22 for the period as Platinum prices rose by US$120 to US$1,713.70 per oz.