TSX falls, Sept. 21-25

Anxiety about global growth soured investor appetite for risk, with data showing Chinese factory activity shrank to a six-and-a-half-year low in September, while U.S. manufacturing growth in the same month stayed at a two-year low. 

Meanwhile, U.S. Federal Reserve Chair Janet Yellen said the U.S. central bank could raise rates later this year if U.S. inflation and employment remained stable. 

Commodities continued their volatile run. Gold rose 0.6% to finish at US$1,146.30 per oz. and nickel climbed 2.8% to US$4.50 per lb., but copper fell 4.5% to US$2.28 per lb., zinc dropped 3.5% to 73¢ per lb. and lead declined 1.7% to 75¢ per lb. 

West Texas Intermediate crude finished relatively flat at US$45.59 per barrel. 

A scandal over rigged diesel emission tests at German carmaker Volkswagen hurt platinum — which is used in diesel catalysts to clean exhaust emissions — and boosted palladium, the main metal in gasoline catalysts. Platinum plunged 3.7% to US$947 per oz., and palladium soared 8.8% to US$665 per oz. 

Canada’s benchmark index fell 1.97% to 13,378.57, the S&P/TSX Capped Diversified Metals & Mining Index dropped 13.7% to 375.47 and the S&P/TSX Global Gold Index fell 0.98% to 127.14.

Agnico Eagle Mines gained $2.29 to $34.59, mainly due to strong drill results from its El Barqueno project in Mexico’s Jalisco state. 

Highlights from prospects at El Barqueno include intercepts of 8.04 grams gold over 5 metres, 2.25 grams gold over 3.6 metres, 15.49 grams over 3 metres, 10.82 grams over 4.9 metres and 2.69 grams over 27.5 metres. 

Agnico aims to finish a resource on El Barqueno by February 2016, and is studying conceptual design for an open-pit heap leach operation. The company has reported potential to extend reserves and resources at its Creston Mascota deposit and its La India mine, which are also in Mexico. 

Shares of Timmins Gold advanced 33.3% to 36¢ per share, buoyed by a $6-million investment by Goldcorp, and news that the junior would acquire a process plant and equipment from Goldcorp’s El Sauzal mine in Chihuahua state for $8 million. 

Timmins Gold says the El Sauzal plant could save US$60 million in initial capital expenses when it builds its Ana Paula project in Guerrero state, and reduce the risk of equipment capex overruns and delays in scheduling equipment deliveries. Timmins Gold’s CEO Bruce Bragagnolo  adds that “the El Sauzal flowsheet is similar to the base case flowsheet outlined in the Ana Paula preliminary economic assessment and require all of the items we have acquired. Some additional items such as a gravity circuit may be required based on ongoing metallurgical studies.”

Goldcorp will acquire 20 million units of Timmins Gold at 30¢ per unit (one share and one half of a warrant). Once completed, Goldcorp will own 9.9% of Timmins Gold’s outstanding shares. 

The El Sauzal plant is a nominal 6,000-tonne-per-day milling and processing facility, with a cyanide circuit and a carbon-in-pulp circuit. 

The company say developming  Ana Paula would need US$100 million in preproduction capital.