Market news

Toronto Stock Exchange

The holiday-shortened August 2-5 period may have been brief, but it didn’t lack drama. The TSX Composite Index suffered its greatest fall since the 2008 recession as the index lost 1,267 points to finish at 11,743.77 points. 

And the downward slide doesn’t appear to be coming to a close. With Standard & Poor’s dropping their rating for U.S. debt to “AA+” from “AAA” status, markets continued to sell-off. 

All that bad news for markets was good news for one commodity, however. Gold shone bright amidst the bearishness as its price rose above the US$1,700 per oz. mark at presstime. 

Investor’s preference was for the bullion itself, rather than for gold miners, whose stocks fell – though not as far as equities overall. The Global Gold Index was off 13 points for the period, finishing at 370.94.

But gold miners’ woes paled in comparison to those of the diversified miners. With the threat of a double-dip recession looming, prices for copper, aluminum, nickel, tin, lead and zinc all fell significantly, and the Capped Diversified Metals & Mining Index fell in step. 

Centamin Egypt ran into the Egyptian bureaucracy at a time it aims to produce as much gold as it can to cash in on historically high prices. The company was told by government officials that it cannot use the amount of explosives it needs for blasting its way toward production targets. The restriction meant the company had to lower its guidance to 210,000 oz. for the year from 290,000 oz. The company’s shares were off 32% to $1.47 for the period. 

A downward revision to guidance also seemed to be playing on Lundin Mining. The company said it expects to produce less copper and zinc this year because of unpredictable mining rates at its Neves-Corvo mine in Portugal. The new guidance calls for 75,400 tonnes of copper ore – 4,000 tonnes below the previous target – while zinc output is now expected to be 112,000 tonnes, down from 120,000 tonnes. Lundin shares were off 26% to $5.33 for the period. 

Greystar Resources also had a rough go of it, with shares off 23% to $1.96 after announcing a greater tax liability than
previously released. The company revised its financial statements to accommodate the extra $6.6 million in taxes payable. The increase in taxes came as result of the Colombian Congress passing a 6% equity tax at the end of last year. 

While positive movers were harder to come by, Namibia Rare Earths managed a 10% gain for the period as its shares wound up at 65¢. The boost came after the company announced results from the first 24 diamond drill holes at its Lofdal rare earth project in Namibia, which confirmed heavy rare earth enrichment in all tested targets.

TSX most active issues

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(000s)HIGHLOWCLOSECHANGE

Lundin MngLUN474027.135.165.33-1.85 

Yamana GoldYRI2834013.9812.5112.95+0.51 

Kinross GoldK2573216.4915.0115.36-0.24 

Eldorado GoldELD1834517.9016.5116.95+0.50 

Barrick GoldABX1676548.0043.9244.89-0.66 

Teck BTCKB1586847.9340.3841.62-5.72 

Centamin EgyptCEE156181.851.421.47-0.68 

Eastern PlatinELR152750.990.810.88-0.12 

Potash Cp SaskPOT1357755.9950.0151.99-3.17 

GoldcorpG1319347.9543.9745.37-0.32

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(000s)HIGHLOWCLOSECHANGE

Ursa Major MinUMJ4900.140.120.14+27.2 

CaNickel MngCML21710.090.070.08+14.2 

Namibia Rare ENRE12750.710.590.65+10.1 

Yukon-Nev GoldYNG30720.560.450.49+8.8 

Vaaldiam ResVAA530.140.120.13+8.3 

Olympus PacifOYM10750.440.380.41+7.8 

Dynacor Gold MDNG2391.010.890.95+6.7 

Treasury MetalTML4621.241.021.18+6.3 

Royal GoldRGL3968.3763.2164.93+5.8 

Central Gold-TGTU_U1863.6060.2562.97+5.2 

Walter EnergyWLT117114.8170.4771.71-38.7 

Centamin EgyptCEE156181.851.421.47-31.6 

Lundin MngLUN474027.135.165.33-25.7 

Northland ResNAU6882.441.801.87-24.6 

Moneta PorcpnME5140.270.200.22-24.1 

Greystar ResGSL6422.631.961.96-23.1 

Aureus MngAUE3031.451.151.15-22.8 

Denison MinesDML45052.021.501.56-22.7 

Labdr Iron MnsLIM60911.028.358.46-22.6 

MalagaMLG10560.260.190.22-21.4

TSX greatest value change

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Royal GoldRGL3919864.93+3.57 

Central Gold-TGTU_U1776762.97+3.15 

Agnico-EagleAEM543774555.22+2.08 

ISh COMEX G TrIGT16024415.82+0.66 

Central FundCEFA152556223.46+0.64 

Yamana GoldYRI2833973212.95+0.51 

Eldorado GoldELD1834512716.95+0.50 

WitwatersrandWGR132256.51+0.32 

Horizns G BearHGD485352110.48+0.23 

Foraco IntlFAR829912.98+0.12 

Walter EnergyWLT11650371.71-45.34 

First QuantumFM2489019116.05-16.41 

Inmet MiningIMN225595757.70-8.29 

Teck BTCKB1586774941.62-5.72 

Teck ATCKA1845043.00-5.10 

AgriumAGU447199079.08-4.53 

Labdr I-Ore RoLIF_U77409332.95-3.88 

Potash Cp SaskPOT1357700851.99-3.17 

Ivanhoe MinesIVN284856821.92-3.10 

Imperial MetalIII14615620.77-2.48

TSX VENTURE EXCHANGE

Junior explorers listed on the S&P TSX Venture Exchange fell sharply in the lead-up to the last-minute agreement by American politicians to raise the U.S. debt ceiling, with the index closing down 167.36 points, or 9.1%, over the Aug. 2-5 period to 1,811.49. The index now sits at a 10-month low, having fallen to a level last seen in October 2010. Trading was slightly lighter than usual, averaging 96 million shares traded daily.

Grand Portage Resources became the most actively traded company on the exchange during the trading period after releasing high-grade gold assays from its Herbert Glacier joint venture (JV) near Juneau, Alaska. The company owns a 65% interest in the gold project and Quaterra Resources holds the rest. The JV partners have released the first three holes of a 4,000-metre drill program at the property, currently focused on the Deep Trench vein. All three holes contained visible gold, with the best returning 9 metres grading 37.03 grams gold per tonne from 137 metres downhole, including 1 metre grading 225.26 grams gold. Mineralization at Deep Trench has now been established almost 1,000 metres along strike and up to 400 metres deep, and the area is still open at depth. 

Nunavut-focused gold explorer Prosperity Goldfields saw the biggest percentage gain over the week after it released an assay-less drilling update for its Kiyuk gold project near the Nunavut-Manitoba border. The company has completed 1,700 metres of diamond drilling so far and is on track to complete 3,500-metres by the end of August, before caribou migrate to the area in the fall.

The company is testing three previously established zones and two new targets. Core from two holes drilled at the Gold Point zone yielded a few specks of visible gold, prompting Prosperity to send the core for priority assay. The company says around 100 small gold grains 0.1 millimetre in size are randomly scattered throughout 78 metres of core in one hole. The news sent Prosperity’s stock up 29¢, or 62.2%, to 73¢ on volume of 765,000 shares. The company has 40.3 million shares outstanding.

Also bucking the downtrend, Batero Gold rose 40¢ to close the week at $3 following more drill results released from its Batero-Quinchia gold-copper porphyry project in Risaralda, Colombia
. The company has released five more holes from a 24,000-metre drill program started in May. The results show Batero is continuing to further delineate and infill the main La Cumbre porphyry zone, with the latest set of holes intersecting 332 metres grading 0.76 gram gold per tonne and 0.11% copper. A series of extensions to the zone both laterally and at depth should be included in the company’s maiden National Instrument 43-101-compliant resource estimate, with release expected before year-end. 

TSX-V most active issues

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(000s)HIGHLOWCLOSECHANGE

Grande PortageGPG82020.400.230.25-0.01 

Sandstorm ResSSL80361.551.371.44+0.07 

Allana ResAAA70771.521.231.32-0.21 

Great WesternGWG65550.930.730.80-0.08 

Prophecy CoalPCY60110.760.590.63-0.00 

Orbite Expl AORTA54903.342.672.91-0.25 

Aurcana CorpAUN49980.770.630.68-0.04 

Prophecy PlatNKL49674.543.013.84+0.87 

Goldex ResGDX45990.090.070.08-0.01 

Quantum RE DevQRE44370.360.270.280.00

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(000s)HIGHLOWCLOSECHANGE

Prosperity GdfPPG8320.730.430.73+62.2 

Altoro GoldATG43820.150.080.12+50.0 

Hudson River MHRM12890.130.080.10+42.8 

Emerick ResERC2480.370.230.34+41.6 

Portal ResPDO2000.210.190.21+40.0 

Upper Can GoldUCC550.240.190.24+33.3 

Sidon Intl ResSD2330.040.030.04+33.3 

Conquest ResCQR5140.080.060.08+33.3 

Starfire MnrlsSFR1740.050.040.04+33.3 

Prophecy PlatNKL49674.543.013.84+29.2 

Sinchao MtlsSMZ1820.170.120.12-45.4 

Silver PursuitSPF590.170.100.10-41.1 

SG Spirit GoldSG4760.150.050.09-35.7 

Nanika ResNKA5730.030.020.02-33.3 

Knick ExplKNX3760.220.140.17-32.0 

Canuc ResCDA460.180.140.14-30.0 

White Tiger MgWTC3620.270.190.19-29.6 

Rome ResRMR1370.500.340.37-28.8 

Randsburg IntlRGZ570.050.050.05-28.5 

Ultra UraniumULU2570.080.050.05-28.5

TSX-V greatest value change

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Prophecy PlatNKL49666333.84+0.87 

Pac Booker MinBKM550929.25+0.72 

Batero GoldBAT13548233.00+0.40 

Prosperity GdfPPG8319070.73+0.28 

Energold DrillEGD6168513.98+0.23 

Amarillo GoldAGC214001.47+0.12 

Indico ResIDI7260000.60+0.12 

Wesgold MnlsWSG100000.62+0.10 

Emerick ResERC2480000.34+0.10 

Mirasol ResMRZ4006765.10+0.09 

Quest Rare MnlQRM14597014.25-0.97 

Atac ResATC7825928.15-0.90 

Rainy River RsRR33345310.38-0.72 

Tasman MetalsTSM10352333.54-0.63 

Geomega ResGMA2044782.05-0.60 

Trelawney M&ExTRR13890014.40-0.60 

Canaco ResCAN10184323.28-0.60 

Lumina CopperLCC3716056.60-0.59 

Callinan RoyalCAA1789362.85-0.50 

Hana MngHMG6456451.60-0.48

U.S. MARKETS

U.S. equities started to crater days before Standard and Poor’s stripped the U.S. of its triple-A rating after markets closed on Aug. 5. On Aug. 4, the Dow Jones Industrial
Average suffered its biggest point-drop since December 2008, while the S&P 500 posted its worst performance since February 2009. For the full trading week, the Dow Jones Industrial Average plunged 698.63 points, or 5.75%, to 11,444.61, while the S&P 500 Index tanked by 92.9 points, or 7.2%, to finish at 1,199.38. Officials at the U.S. ratings agency said on Aug. 8 that the earliest a sovereign has ever returned to an “AAA” rating was nine years, and confirmed that another rating reduction could be in the cards if there is “greater fiscal slippage.”

Cliffs Natural Resources tumbled US$13.36 to US$76.46, while BHP Billiton fell US$12.41 to US$79.14. Even the larger precious metals companies weren’t spared. Barrick Gold dropped US$1.71 to US$45.86, Freeport-McMoRan Copper & Gold fell US$6.97 to US$45.99 and Newmont Mining slid US$1.20 to US$54.41.

The few companies that landed in positive territory included Randgold Resources, which topped the list of gains with an advance of US$3.67 to US$94.48. On Aug. 4, Randgold reported it had boosted gold production for the three months to June by 33% quarter on quarter and 97% over the year-earlier quarter on the back of a “record all-round performance and contributions” from its new Tongon and Gounkoto mines in Côte d’Ivoire and Mali. Profit for the period reached US$128.4 million, up 180% quarter-on-quarter and 253% over the second quarter of 2010. At the same time, cash operating costs per oz. dropped, falling from US$677 in the first quarter to US$579 at the end of the second quarter, reflecting “the improved group production mix resulting from the ramp-up of Tongon and the start-up of the Gounkoto mine.” Royal Gold added US$2.44 to US$66.54, Agnico-Eagle Mines rose 60¢ to US$56.35 and Yamana Gold was up 24¢ to US$13.22. The Philadelphia Gold and Silver Index fell 9.75 points to 196.06. Gold moved from its New York close of US$1,620.30 per oz. on Aug. 1 to finish at US$1,663.40 per oz. on Aug. 5. 

U.S. most active issues

VOLUMEWEEK

(000s)HIGHLOWCLOSECHANGE

Alcoa*AA17822115.1512.2912.79-1.91 

Freeport McMo*FCX10467654.5544.0345.99-6.97 

Potash C Sask*POT5634359.9650.7853.09-4.72 

Kinross Gold*KGC5499017.1515.2515.66-0.68 

Barrick Gold*ABX5431749.9044.5945.86-1.71 

Silver Wheatn*SLW5041538.8132.3534.15-1.93 

Alpha Nat Res*ANR4972844.0530.2532.31-10.40 

Newmont Mng*NEM4875758.0553.3854.41-1.20 

Hecla Mining*HL466558.386.917.16-0.61 

Vale*VALE4659832.9726.8827.98-4.46

U.S. greatest percentage change

VOLUMEWEEK

(000s)HIGHLOWCLOSECHANGE

Tombstone Exp*TMBXF4770.080.050.08+14.2 

Silver Dragon*SDRG4700.150.120.14+7.6 

Gold Reserve*GRZ3492.712.352.50+5.0 

Randgold Res*GOLD612398.4589.4394.48+4.0 

Pac Booker Mn*PBM2310.058.839.41+3.9 

Royal Gold*RGLD568470.8664.0366.54+3.8 

Alberta Star *ASXSF200.300.290.30+3.4 

Samex Mng*SMXMF4991.531.271.47+2.0 

Miranda Gold*MRDDF1390.590.470.52+1.9 

Yamana Gold*AUY1890614.4112.7013.22+1.8 

Walter Energy*WLT5047125.8371.4673.30-40.2 

America West*AWSR861.120.710.80-28.5 

Anooraq Res*ANO12270.780.560.58-25.6 

El Capitan Pr*ECPN26700.700.450.47-25.4 

Patriot Coal*PCX702519.9213.2814.20-24.9 

Alpha Nat Res*ANR4972844.0530.2532.31-24.3 

Denison Mines*DNN11862.161.521.60-24.1 

Consol Energy*CNX3114354.5840.4441.59-22.4 

Douglas Lk Ml*DLKM5130.460.350.35-20.4 

Quest Rare Mn*QRM24476.004.014.35-20.4

U.S. greatest value change

WEEK

VOLUMECLOSECHANGE

Randgold Res*GOLD612329694.48+3.67 

Royal Gold*RGLD568369766.54+2.44 

Agnico-Eagle*AEM1621216656.35+0.60 

Pac Booker Mn*PBM229969.41+0.36 

Yamana Gold*AUY1890597813.22+0.24 

Gold Reserve*GRZ3491832.50+0.12 

Central Fund*CEF1821806223.93+0.09 

Eldorado Gold*EGO734314017.32+0.05 

Samex Mng*SMXMF4991851.47+0.03 

Miranda Gold*MRDDF1392510.52+0.01 

Walter Energy*WLT504669473.30-49.27 

Cliffs Nat Rs*CLF2154208376.46-13.36 

BHP Billi-BHP*BHP3182015879.14-12.41 

Consol Energy*CNX3114310841.59-12.01 

BHP Billi-BBL*BBL1599566164.07-11.08 

Peabody Enrgy*BTU4235810646.87-10.52 

Alpha Nat Res*ANR4972779432.31-10.40 

Soc Quim&M Ch*SQM351405857.02-7.30 

Mosaic*MOS4540442263.59-7.08 

Teck B*TCK2980421542.46-6.98