TSX mixed after Brexit, June 20–24

Canada’s main stock index lost most of its early gains in the week due to the Brexit vote that increased global uncertainty, sending investors flocking to safe havens like gold. The S&P/TSX Composite Index ended the June 20–24 trading period at 13,891.88, down 0.07%. The S&P/TSX Global Gold Index rose nearly 5% to 243.63, after the spot gold price jumped 1.4% to US$1,315.60 per oz. The S&P/TSX Global Mining Index advanced 1.5% to 59.08. The S&P/TSX Capped Diversified Metals & Mining Index, however, fell 1.9% to 554.32.

Marathon Gold surged 34.2% to 51¢ per share on positive results from its summer 2016 drill program at the Marathon deposit, one of the four deposits on its Valentine gold camp in central Newfoundland. A 140-metre down-hole extension of the previously drilled hole MA-15-47 returned the highest gold grades to date at the deposit from 200 metres below surface. The best intercept hit 20.17 grams gold per tonne (uncut) over 7.2 metres (true thickness) including 190.88 grams gold (uncut) over 0.7 metre (true thickness). The extension shows the “potential for growth of a high-grade underground resource.” The Marathon deposit remains open along strike and at depth. The total strike length of the mineralized corridor, including the Marathon resource pit shell, now extends 1.7 km.

Metallurgical testwork should be completed in the third quarter, with column tests indicating that the Marathon ore could be heap-leachable. The Marathon deposit currently hosts an open-pit and underground resource of 195,600 oz. (3 million indicated tonnes of 1.98 grams gold) and 23,800 oz. (280,000 inferred tonnes at 2.64 grams gold).

RTG Mining rose 12% to 51¢ per share, ahead of its June 27 announcement that Thor Exploration agreed to buy its interest in the Segilola gold project in Nigeria for up to US$8.5 million. The transaction — expected to close at the end of July — is conditional on several factors, including regulatory approvals, no adverse material changes before closing, Thor raising at least US$4 million and agreeing to acquire the balance of Segilola from the other project owner.

Yorbeau Resources shares jumped nearly 12% to 10¢ after inking a non-binding letter of intent with Kinross Gold, whereby the major could acquire 100% of its Rouyn gold property in Quebec over four years. As part of the option, Kinross must complete a resource estimate on the property after spending $12 million on exploration, including a $3 million commitment in the first 18 months. Following the resource estimate, Kinross could buy 100% of the property for a cash payment of US$25 million, plus 2% of the prevailing gold prices multiplied by the gold ounces identified by Kinross. The junior would have a 2% net smelter return royalty on any gold ounces produced in excess of those identified by Kinross. The property contains four known gold deposits.