Toronto Stock Exchange, Aug. 26-30

The S&P/TSX Composite Index fell during the trading week amid concerns that Western countries would intervene militarily in Syria’s civil war. Toronto’s main index plunged 108 points to finish the week at 12,653.90. 

Mining stocks followed close behind, with the S&P/TSX Capped Diversified Metals & Mining Index losing 38 points to 765.29. The S&P/TSX Global Gold Index slumped 11 points to 199.21, as the New York spot price for gold dipped US$1.30 per oz. to US$1,396.50.

Rockwell Diamonds gained nearly 40% to close at 30¢ after reporting plans to increase monthly production volumes at its diamond projects in South Africa’s Middle Orange River region in hopes of recovering more large stones to bolster quarterly earnings. The company processes 360,000 cubic metres of ore a month but is targeting 500,000 cubic metres a month in the medium-term. Helping reach that rate are the company’s new Saxendrift Hill and Niewejaarskraal mines. The former mine is in production, while the latter is ramping up to production.  

Liberty Mines gained some momentum after announcing that it’s buying the Snow Lake gold project in Manitoba from QMX Gold for $20 million in cash. Its shares jumped 28% during the week to end at 64¢. According to a 2010 feasibility study, the Snow Lake project is expected to churn out 83,000 oz. gold per year for five years. Pre-production capital costs are pegged at $40.8 million, with payback estimated within two years. The Snow Lake property hosts the past-producing New Britannia mine and related infrastructure and equipment, including a fully permitted, 2,150-tonne-per-day mill and tailings facility. The transaction is expected to close in late November, after which Liberty would own two fully permitted mills. Interestingly, Liberty named David Rigg as its new president and CEO. Rigg is the former chairman, president and CEO of QMX Gold.

Toronto-based Dundee Precious Metals was one of the week’s top value gainers. The company saw its stock advance 36¢ per share to close at $6.61. Dundee published its first resource estimate for the Shahumyan deposit at its producing Kapan polymetallic-gold mine in Armenia. The deposit contains 2.8 million indicated tonnes averaging 5.2 grams per tonne gold equivalent, and another 10.6 million inferred tonnes of 4.5 grams gold equivalent. The company said its best option at Kapan is to expand the underground mine to include the new resource from Shahumyan. It intends to conduct an internal study to assess this possibility, with results expected in early 2014.

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