Market news

Toronto Stock Exchange

Investors took a dismal view of the global economy and their mood took a toll on Canadian markets, as the S&P/TSX Composite Index fell 169 points to finish the holiday shortened period at 12,202 points.

Investors turned sour after Alcoa — a bellwether of the global economy — reported disappointing earnings and issued a weaker outlook on global aluminum demand, and Standard & Poor’s downgraded Spain’s sovereign credit rating two notches, to just above “junk” status amidst a deepening economic recession.

Gold failed to rally against the grim economic outlook, and the price for the metal fell US$37 to US$1,739 per oz. That drop pulled the S&P/TSX Global Gold Index down 11 points to 335 points. The diversified miners slumped as well, with the S&P/TSX Capped Diversified Metals and Mining Index falling 8 points to 906.02 points, as the price for copper fell 4¢ to US$3.69 per lb.

AuRico Gold was one of the few good stories amongst gold miners for the period. The company’s shares rose 21% after it announced selling its Ocampo mine in Mexico for $750 million. AuRico said that after paying off $300 million in debt, most funds are expected to go back to investors in the form of a one-time payment. The move highlights investors’ growing appetite for yield. Buying up Ocampo is Mexican billionaire Carlos Slim, who is making the acquisition through his Minera Frisco.

Shares of Keegan Resources were up 15% to $3.64 on the back of a new resource estimate for the company’s Esaase gold project in Ghana. Keegan also announced it would cut projected costs at the mine by using a selective approach with lower mining rates and higher grades. The scaled-down development plan should lower capital expenditures to US$260 million, with a drop in cash operating costs as well. Global resources fell under the new calculation by 2%, but the average grade jumped by 55%. Measured and indicated resources now stand at 68.92 million tonnes grading 1.73 grams gold per tonne for 3.83 million oz. gold, and inferred resources add 22.23 million tonnes grading 1.75 grams gold for 1.25 million contained oz. gold.

A strategic partnership for St. Augustine Gold & Copper had the company’s shares up 40% to 41¢ for the period. Its new partner will be Philippine-based Queensberry Mining and Development, which will take a 24% interest in the company through option agreements and a private placement.

Ram Power’s shares ran up 23% to 25¢ after it said the Nicaraguan government approved a power sales tariff increase for its San Jacinto-Tizate geothermal project. The tariff increase is 17% and goes into effect Oct. 1, with an annual increase of 3% until 2022. With the increase, the company can recover unanticipated costs associated with resource development and plant construction.

TSX most active issues

		Volume	Week
		(000s)	High	Low	Close	Change
Kinross Gold	K	16515	10.57	9.95	9.99	–	0.6
Starfield Res	SRU	14237	0.02	0.01	0.01	–	0.01
Teck Res B	TCKB	13248	30.92	29.81	29.89	–	0.21
AuRico Gold	AUQ	12010	7.62	6.26	7.07	+	0.55
Barrick Gold	ABX	10109	40.64	38.12	38.31	–	2.82
Eldorado Gold	ELD	9688	14.65	13.7	13.75	–	0.82
Baja Mng	BAJ	9304	0.13	0.09	0.11	+	0.02
B2Gold	BTO	9096	4.08	3.88	3.93	–	0.13
Lake Shore Gld	LSG	8114	0.97	0.83	0.85	–	0.11
Yamana Gold	YRI	7605	18.87	17.95	18.34	–	0.26

TSX greatest percentage change

		Volume	Week
		(000s)	High	Low	Close	Change
Redzone Res	REZ	401	0.14	0.1	0.14	+	47.3
St Augustine	SAU	2095	0.45	0.29	0.41	+	39.6
Homeland Enrgy	HEG	314	0.02	0.02	0.02	+	33.3
Baja Mng	BAJ	9304	0.13	0.09	0.11	+	23.5
Ram Power	RPG	6180	0.28	0.18	0.25	+	22.5
Ratel Grp	RTG	408	0.16	0.13	0.15	+	20
Lucara Diam	LUC	3398	0.61	0.5	0.6	+	20
CanAlaska Uran	CVV	135	0.25	0.2	0.25	+	19
Keegan Res	KGN	2369	3.77	3.04	3.64	+	14.8
Candente Gold	CDG	19	0.19	0.15	0.19	+	12.1
Starfield Res	SRU	14237	0.02	0.01	0.01	–	50
EMC Metals	EMC	420	0.07	0.05	0.05	–	28.5
Intrepid Mns	IAU	980	0.4	0.34	0.35	–	24.1
Carlisle Goldf	CGJ	917	0.2	0.15	0.17	–	21.4
Minco Gold	MMM	29	0.68	0.56	0.56	–	21.1
Northcliff Res	NCF	199	0.43	0.35	0.35	–	20.4
Levon Res	LVN	1035	0.45	0.38	0.39	–	19.7
QMX Gold	QMX	673	0.3	0.23	0.24	–	18.6
NovaCopper	NCQ	100	2.1	1.8	1.8	–	17.8
Rio Verde Mnls	RVD	2214	0.28	0.24	0.24	–	17.2

TSX greatest value change

		Week
		Change	Close	Change
Walter Energy	WLT	24794	34.74	+	2.87
Horizns G Bear	HGD	1030162	8.92	+	0.66
AuRico Gold	AUQ	12010338	7.07	+	0.55
Karnalyte Res	KRN	101934	8.49	+	0.49
Keegan Res	KGN	2369153	3.64	+	0.47
Coeur d Alene	CDM	35707	28.39	+	0.43
Harry Winston	HW	670648	12.84	+	0.36
Gabriel Res	GBU	1958649	2.12	+	0.12
St Augustine	SAU	2094565	0.41	+	0.12
Lucara Diam	LUC	3397625	0.6	+	0.1
Royal Gold	RGL	55897	86.7	–	9.59
Barrick Gold	ABX	10109399	38.31	–	2.82
Goldcorp	G	7601344	42.67	–	2.51
Franco-Nevada	FNV	2106294	57.3	–	2.16
Agnico-Eagle	AEM	1941949	50.5	–	1.88
Tahoe Res	THO	742797	19.84	–	1.72
Seabridge Gold	SEA	78233	17.61	–	1.15
Silver Wheaton	SLW	4763322	38.11	–	1.13
Agrium	AGU	2482166	101.16	–	1.04
Silver Std Res	SSO	590323	14.26	–	1.03

TSX Venture Exchange

The S&P/TSX Venture Composite Index fell 52.2 points, or 3.9%, during the shortened period, eventually closing at 1,292.81 points.

The week started out on a sombre note, with the International Monetary Fund (IMF) cutting its growth forecast for the world economy by 0.2% to 3.3% in 2012. The IMF cited “sluggish growth and uncertainty” amongst advanced economies as a major concern, which in turn has affected developing countries through “trade and financial channels.”

Falling commodity prices also took a toll on the market. Gold was off US$37 per oz. and closed at US$1,739. Copper dropped 4¢ to US$3.69 per lb. Brent crude oil finished with a 56¢ decline, at US$115.16 per barrel.

Explorer Ascot Resources jumped 25¢ before closing at $1.39 per share. On Oct. 10, the company released drill results from its Premier gold-silver property in B.C.’s Cassiar mining district. Ascot is focusing on three target zones at Premier named Big Missouri, Martha Ellen and Sparky. Drilling encountered widespread gold and silver mineralization in all three areas, with highlights including: 18 metres averaging 1.99 grams gold per tonne from 165 metres depth in hole 12-373; 33 metres grading 1.17 grams gold and 62 grams silver from 302 metres depth in hole 12-381; and 21 metres of 1.15 grams gold and 50 grams silver from 172 metres depth in hole 12-391.

Yukon-focused explorer Goldstrike Resources plunged 46¢ per share, or 61%, en route to a 29¢ close after releasing results from a 2012 field exploration program at its Plateau gold property in the Yukon. The company released high-grade grab samples — highlighted by 530 grams gold from a rock grab at its Plateau South target — but a scout drilling campaign failed to return significant gold intersections to accompany the high grades at surface. Prospect drilling at the company’s Goldstack zone on its Plateau South property targeted surface mineralization defined by a composite channel cut that carried 14.26 grams gold over 2.5 metres. A scout hole at the site cut 9 metres averaging 0.7 gram gold.

Comstock Metals also had a tough run following the release of Yukon drill
results. The gold explorer dropped 21¢, or 38%, before closing at 34¢ per share. Comstock released two drill holes from its QV project in the Yukon’s White Gold district. Though the initial results confirm gold mineralization, with results including 82 metres grading 1.02 grams gold from 20 metres depth in hole 12-001, and 56.4 metres averaging 1.28 grams gold from 18 metres depth in hole 12-002. Comstock is finishing an eight-hole program over 1,300 metres, testing strong gold enrichment discovered during trenching at its VG zone.

 

TSX-V most active issues

		Volume	Week
		(000s)	High	Low	Close	Change
Sandstorm Mt&E	SND	15438	0.51	0.43	0.48	+	0.02
GoldQuest Mng	GQC	12619	1.46	0.84	1.01	–	0.4
Aurcana Corp	AUN	6810	1.17	1.07	1.09	–	0.07
Hana Mng	HMG	5833	0.45	0.39	0.42	–	0.02
Nighthawk Gold	NHK	5283	0.22	0.14	0.15	–	0.04
Goldstrike Res	GSR	5134	0.76	0.27	0.29	–	0.46
Nevada Sunrise	NEV	4500	0.11	0.09	0.1	+	0.01
Groundstar Res	GSA	3977	0.02	0.01	0.01	–	0.01
Apogee Silver	APE	3563	0.1	0.09	0.09	–	0.02
Discovery Vent	DVN	3444	0.27	0.21	0.26	+	0.03

TSX-V greatest percentage change

		Volume	Week
		(000s)	High	Low	Close	Change
Solitaire Mnls	SLT	100	0.01	0.01	0.01	+	100
Tintina Mines	TTS	11	0.15	0.14	0.15	+	93.3
Baroyeca Go&Si	BGS	650	0.03	0.02	0.03	+	66.6
Menika Mining	MML	143	0.03	0.03	0.03	+	66.6
Sierra Madre D	SMG	834	0.06	0.03	0.06	+	57.1
Intigold Mines	IGD	447	0.35	0.22	0.31	+	55
Coronet Mtls	CRF	1587	0.1	0.06	0.1	+	53.8
IEMR Res	IRI	42	0.05	0.04	0.05	+	50
Dot Res	DOT	88	0.05	0.04	0.05	+	50
Plato Gold	PGC	438	0.02	0.01	0.02	+	50
Groundstar Res	GSA	3977	0.02	0.01	0.01	–	66.6
Goldstrike Res	GSR	5134	0.76	0.27	0.29	–	61.4
Black Bull Res	BBS	10	0.01	0.01	0.01	–	50
Stratabd Mnr	SB	125	0.1	0.06	0.07	–	45.8
Canadn Plat	CPC	38	0.08	0.05	0.05	–	43.7
Stakeholdr Gld	SRC	303	0.04	0.02	0.02	–	42.8
Solid Gold Res	SLD	100	0.05	0.03	0.03	–	40
Midasco Cap	MGC	130	0.03	0.02	0.02	–	40
Plains Ck Phos	PCP	546	0.03	0.02	0.02	–	40
Secova Mtls	SEK	160	0.03	0.02	0.02	–	40

 TSX-V greatest value change

		Week
		Change	Close	Change
Pac Booker Min	BKM	302550	3.88	+	0.88
Inform Expl	IX	17900	0.9	+	0.25
Ascot Res	AOT	552861	1.39	+	0.25
Eurasian Minls	EMX	497073	2.44	+	0.19
Galway Res	GWY	2536612	1.22	+	0.19
Gold Reach Res	GRV	143347	1.7	+	0.15
Foran Mng	FOM	142400	0.69	+	0.13
Giyani Gold	WDG	390332	1.24	+	0.12
Intigold Mines	IGD	447383	0.31	+	0.11
Alhambra Res	ALH	151557	0.32	+	0.1
Sandstorm Gld	SSL	2608216	13.31	–	1.04
Chesapeake Gld	CKG	45301	8.55	–	0.85
Lumina Copper	LCC	398354	9	–	0.57
Goldstrike Res	GSR	5134112	0.29	–	0.46
GoldQuest Mng	GQC	12618747	1.01	–	0.4
Reservoir Mnls	RMC	414413	2.92	–	0.33
Kaminak Gold	KAM	599034	1.97	–	0.32
Santacruz Silv	SCZ	591064	2.17	–	0.28
Gold Reserve	GRZ	26034	3.24	–	0.24
Comstock Mtls	CSL	2365514	0.34	–	0.21

U.S. Markets

U.S. markets retreated despite data showing that Americans are the most upbeat they have been in five years. The approaching U.S. election, worries about Europe and slowing Chinese growth and corporate earnings all put a damper on U.S. equities. The S&P 500 Index posted its biggest weekly percentage drop since June, falling 2.21%, or 32.34 points, to 1,428.59, while the Dow Jones Industrial Average fell 2.10%, or 281.30 points, to 13,328.85. The Philadelphia Gold and Silver Index lost 3.46%, or 6.63 points, to 184.90 points.

Long-suffering U.S.-based thermal coal producers caught a break last week when natural gas prices moved higher due to lower-than-expected inventory building. Consol Energy topped the list of value gains surging 12%, or US$3.79, to US$35.14 per share; Peabody Energy climbed 14.8%, or US$3.33, to US$25.71; Alpha Natural Resources finished US$1.30, or 19.7% higher, at US$7.88; and Arch Coal advanced US$1.02 to US$7.62, or 15.4%.

Cliffs Natural Resources rose US$2.14 to US$40.50 on news it had reached a tentative agreement with the United Steelworkers on a new three-year labour contract offer that would cover 2,400 workers at the company’s Empire and Tilden mines in Michigan, and its United Taconite and Hibbing Taconite mines in Minnesota.

Keegan Resources surged 14.4% to US$3.72 per share on the back of an updated resource estimate for its 90%-owned Esaase gold project in Ghana, and confirmation that the company plans mining the deposit at lower rates and higher grades to cut costs.

Patriot Gold jumped 13.8% to 23¢ on news that it will begin a resource-definition drill program to expand the parameters of a potential starter pit at its Moss gold-silver project in Arizona, and positive assay results from its Bruner gold project in Nevada, where drill hole 127C returned 52.4 metres averaging 2.21 grams gold per tonne.

Compass Minerals was up 72¢ to US$76.62 — still riding high from news the previous week that it had purchased the mining rights to about 100 million tons of salt reserves in the Chile’s Atacama desert for US$6.5 million.

U.S. most active issues

		Volume	Week
		(000s)	High	Low	Close	Change
Alpha Nat Res*	ANR	155979	8.56	6.45	7.88	+	1.3
Alcoa*	AA	124636	9.25	8.66	8.69	–	0.4
Arch Coal*	ACI	88928	8	6.42	7.62	+	1.02
Freeport McMo*	FCX	66377	41.57	39.82	40.14	–	0.06
Peabody Enrgy*	BTU	57566	26.22	22.04	25.71	+	3.33
Cliffs Nat Rs*	CLF	41876	43.25	38.2	40.5	+	2.14
Kinross Gold*	KGC	36580	10.85	10.14	10.18	–	0.66
Stillwater Mg*	SWC	28439	12.33	10.14	10.22	–	2.1
Barrick Gold*	ABX	28293	41.7	38.89	39.02	–	2.98
Vale*	VALE	23539	18.67	17.54	18.2	+	0.49

U.S. greatest percentage change

		Volume	Week
		(000s)	High	Low	Close	Change
Silver Dragon*	SDRG	602	0.01	0	0.01	+	400
Alpha Nat Res*	ANR	155979	8.56	6.45	7.88	+	19.7
Pac Booker Mn*	PBM	59	4.9	3	3.91	+	18.4
Arch Coal*	ACI	88928	8	6.42	7.62	+	15.4
Peabody Enrgy*	BTU	57566	26.22	22.04	25.71	+	14.8
Strata O&G*	SOIGF	60	0.14	0.1	0.12	+	14.5
Keegan Res*	KGN	310	3.86	3.11	3.72	+	14.4
Patriot Gold*	PGOL	150	0.24	0.21	0.23	+	13.8
Santa Fe Gold*	SFEG	1115	0.41	0.3	0.38	+	13.4
Consol Energy*	CNX	21261	35.69	31.03	35.14	+	12
El Capitan Pr*	ECPN	2380	0.38	0.26	0.3	–	20
Cornerstone C*	CTNXF	13	0.07	0.07	0.07	–	19.5
Minco Gold*	MGH	245	0.74	0.56	0.58	–	18.3
NovaCopper*	NCQ	795	2.24	1.85	1.85	–	17.7
Gold Am Mng*	SILA	224	0.03	0.02	0.02	–	17.2
Stillwater Mg*	SWC	28439	12.33	10.14	10.22	–	17
Exeter Res*	XRA	248	1.6	1.37	1.37	–	14.3
Lake Shore Gd*	LSG	1105	1	0.85	0.87	–	12.5
Mines Managem*	MGN	188	1.46	1.28	1.29	–	12.2
China Shen Zh*	SHZ	153	0.32	0.27	0.27	–	11.9

U.S. greatest value change

		Week
		Change	Close	Change
Consol Energy*	CNX	21260613	35.14	+	3.79
Walter Energy*	WLT	4789775	35.54	+	3.39
Peabody Enrgy*	BTU	57566376	25.71	+	3.33
Cliffs Nat Rs*	CLF	41875816	40.5	+	2.14
Alliance Rs P*	ARLP	384365	63.33	+	1.95
Alpha Nat Res*	ANR	1.56E+08	7.88	+	1.3
Arch Coal*	ACI	88927604	7.62	+	1.02
AngloGold Ash*	AU	9556543	34.28	+	0.91
Rio Tinto*	RIO	2065119	48.69	+	0.87
Compass Mnls*	CMP	291303	76.62	+	0.72
Royal Gold*	RGLD	6449177	88.6	–	9.72
Randgold Res*	GOLD	1912522	121.22	–	3.49
Barrick Gold*	ABX	28292570	39.02	–	2.98
Goldcorp*	GG	18848436	43.47	–	2.71
Franco-Nevada*	FNV	1498148	58.43	–	2.37
Stillwater Mg*	SWC	28439014	10.22	–	2.1
Agnico-Eagle*	AEM	5249982	51.5	–	2.07
OM Group*	OMG	603326	17.76	–	1.29
Silver Wheatn*	SLW	16912764	38.87	–	1.17
Silver Std Re*	SSRI	2924008	14.51	–	1.14