TSX climbs, May 16–20

Canada’s benchmark index advanced ahead of the Victoria Day holiday weekend, rising 171 points, or 1.2%, to 13,919.58, as investors took in higher oil prices and the possibility that the U.S. Federal Reserve could increase interest rates in mid-June. The S&P/TSX Global Mining Index added 0.6% to 56.38. The S&P/TSX Capped Diversified Metals & Mining Index jumped 2.8% to 506.91. The S&P/TSX Global Gold Index fell 1% to 224.04, as spot gold retreated US$20.90 per oz. to US$1,251.90. The July contract for crude oil rose 4.8% to US$48.41 per barrel, and the July contract for Brent crude climbed 1.8% to US$48.72 per barrel, on the back of supply disruptions in Nigeria, Canada and Libya.

Coro Mining was the top percentage gainer, soaring nearly 28% to 12¢ per share. On May 18, the junior reported that its 65% held Chilean subsidiary, SCM Berta, has optioned the Salvadora copper project in Chile. SCM Berta could acquire 100% of the property by paying US$3 million over the next three years, plus US$5,000 on signing the agreement. SCM Berta has also leased the Veronica property in Chile for five years in exchange for a production royalty. On May 24, Coro announced a $10-million private placement, where it will offer 100 million shares at 10¢ apiece in two tranches. The proceeds would help fund Coro’s Marimaca exploration project and growth in its SCM Berta operations. The junior also signed a term sheet with its major shareholder, Greenstone Resources, to whom it owes US$8.1 million in convertible debentures. Greenstone has agreed to convert the repayment amount at a higher price of 10¢ per share instead of the original 4¢ per share to lower dilution. Greenstone receives 106.7 million shares in the conversion and would own 53.9% of Coro.

Shares in Sierra Metals rose 24% to $1.64 on no new news. The week before, it reported weak first-quarter financials, including an adjusted net loss of US$2 million, or a cent per share, compared to an adjusted profit of US$4.1 million, or US3¢ per share, a year ago. The loss came from lower revenues of US$23.7 million due to declining metal prices, as well as lower head grades and recoveries at its Yauricocha and Bolivar mines in Peru and Mexico. The Cusi silver mine, also in Mexico, had record silver-equivalent production and improved costs, despite lower silver recoveries.

Kinross Gold was the most traded stock, with 41.6 million shares changing hands. It slipped 19¢ to finish at $6.50 per share, on no news. On May 24, the miner announced that its unionized employees at Tasiast were on strike, following a strike notice announced on May 10. The company says it remains open to restarting negotiations with union representatives and does not anticipate the strike will affect the mine’s phase-one expansion.