Toronto Stock Exchange, Jan. 27-31

The Canadian market fell slightly during the week after the latest move by the U.S. Federal Reserve to cut its stimulus program by another US$10 billion per month, given signs of improvement in the U.S. economy.

The S&P/TSX Composite Index dipped 22.82 points to close at 13,717.76. Despite the spot gold price sliding US$23.10 per oz. to US$1,245.90, the S&P/TSX Global Gold Index stayed relatively flat at 182.37. The S&P/TSX Capped Diversified Metals & Mining Index lost 4.58 points to 815.49.

Teranga Gold was the week’s most active stock after the Toronto-based firm released solid fourth-quarter and year-end results from Sabodala in Senegal, its sole gold mine.

Teranga produced 52,368 oz. gold in the last three months of 2013, bringing its full-year output to 207,204 oz., near the high end of its 190,000 to 210,000 oz. guidance. Total cash costs were also impressive, averaging US$711 per oz. for the December quarter and US$641 per oz. for the year, beating the forecast of US$650 to US$700 per oz. All-in sustaining costs per oz. were US$850 in the quarter and US$1,033 per oz. for the year, within expectations. This year Teranga is targeting production of 220,000 to 240,000 oz. at costs similar to last year.

Teranga is working on developing a single mine plan for its newly acquired Oromin Joint Venture Group deposits, which are beside Sabodala. The stock added 20¢ to close at 93¢ on 24.3 million shares traded.

Rivals Osisko Mining and Goldcorp also saw heavy trading. Montreal-based Osisko gained 12¢ to end at $6.68 on 19.9 million shares traded, while Vancouver-based Goldcorp advanced $1.19 to $27.79, as 17.4 million shares changed hands. 

On Jan. 29, Osisko filed its directors’ circular in response to the hostile takeover that Goldcorp made on Jan. 14, urging shareholders to reject the offer. In a separate release that day, Osisko announced it’s taking legal action against Goldcorp, alleging the senior “misused confidential information” when launching its offer. Osisko wants the Quebec Superior Court to invalidate the bid.

Meanwhile, Goldcorp has dismissed those allegations, saying it will defend its position and bid for Osisko.

Franco-Nevada topped the week’s value gainers, adding $2.14 to end at $54.05, after updating the market on First Quantum’s Cobre Panama copper–gold–molybdenum project in Panama.

In 2012 Franco-Nevada agreed to provide US$1 billion in funds after spending US$1 billion developing Cobre Panama, in exchange for a precious-metals stream.  

First Quantum now intends to build a larger operation there, averaging 70 million tonnes a year for the first decade. Capital costs are estimated at US$6.4 billion, which is up from US$2 billion previously. First production has been delayed to late 2017 from 2016.

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