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It was a turbulent week for the Toronto Stock Exchange. The S&P/TSX Composite Index gained for three straight sessions, before plummeting 351 points on June 21 for the biggest one-day loss of the year. The next day the index recovered slightly to close at 11,435.54, down 89 points from the previous week. The drop came as Moody’s Investors Service downgraded the credit ratings on 15 major banks, including Canada’s largest bank, the Royal Bank of Canada, while investors worried about slower global growth hurting commodity prices.

During the week the spot price for gold lost US$54 per oz. to finish at US$1,572.30. This dampened the performance of gold miners, and the S&P/TSX Global Gold Index fell 16 points to end the week at 305.98. Similarly, the S&P/TSX Capped Diversified Metals & Mining Index tumbled 29 points to 865.16.

Extorre Gold Mines was the week’s biggest percentage gainer and most traded stock, moving up 64% after Yamana Gold tabled a $414-million bid for the junior, which has planned to stagger development at its Cerro Moro gold-silver project in Argentina to reduce initial capital costs. Yamana intends to offer $3.50 in cash plus 0.0467 of its own shares for each Extorre share, for an implied transaction price of $4.26 per Extorre share and a 54% premium over Extorre’s 20-day, volume-weighted average price for the period ended June 15. The junior saw 70.7 million shares traded as it closed up $1.63 to $4.17 a share, making it the week’s third-largest value gainer.

Baja Mining saw its share price gain 40% to close at 21¢ as it made a handful of announcements, including having funded a US$21-million cash call to shareholders, which will let it continue critical-path activities at its Boleo polymetallic project in Baja California Sur, Mexico. It also received a 45-day standstill agreement from lenders. Earlier in the week Baja said one of its largest shareholders, Louis Dreyfus Commodities Metals Suisse, had initiated a lawsuit against it with the Supreme Court of British Columbia alleging that it failed to disclose the project’s cost overruns in a timely fashion. Baja’s management said it will “vigorously” defend the action. The updated cost overrun at Boleo is estimated at US$400 million.  

On the negative side of the ledger, Centerra Gold was the week’s biggest percentage and value loser, sliding 28%, or $3.35 to close at $8.71, before touching a two-and-half-year low of $7.66. The plunge came after the Kyrgyz parliament said it was discussing whether to revoke Centerra’s mining licence for the Kumtor gold mine, following a report that claimed the company had committed several wrongdoings, including causing substantial environmental damage. The company said the report’s findings are without merit.

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