Miners drag down TSX, May 26-30

It was a tough week for the Toronto Stock Exchange. The S&P/TSX Composite Index dropped 103.94 points, or 0.71%, to end the trading week at 14,604.16, while the S&P/TSX Capped Diversified Metals & Mining Index fell 33.82 points, or 3.82% to 851.33, and the S&P/TSX Global Gold Index fell 6.77 points, or 3.83%, to 169.97. The New York spot price for gold fell 3.22% to US$1,251.30 per oz.

Speculation that B2Gold is planning another acquisition made the Vancouver-based gold producer the week’s most actively traded stock. Some predict B2Gold will acquire Australia-based Papillon Resources for its high-grade Fekola gold deposit in Mali, West Africa. The company already has two mines in Nicaragua, one mine in the Philippines and a portfolio of development and exploration assets in Nicaragua, the Philippines, Namibia and Colombia. Late last year, B2Gold acquired Volta Resources and its advanced-stage Kiaka gold project in Burkina Faso, along with two exploration projects, and in 2012 picked up CGA Mining and its assets in the Philippines. B2Gold’s shares dropped 26¢ to close the week at $2.63.

Agnico Eagle Mines ended the week $1.31 per share lower at $32.99. The gold miner said it is selling all of its shares in Sulliden Gold to Rio Alto Mining for $1.10 per share — or a total of $29.7 million — in a deal that allows Agnico to reallocate cash for strategic uses. Agnico intends to convert its 18.9 million Sulliden warrants into Rio Alto warrants and management described the proposed combination of Rio Alto’s operations in Peru with Sulliden’s nearby Shahuindo project as making “good business sense, given Rio Alto’s high-quality mine-building skills.” Agnico says it made a profit on its investment in Sulliden.  

Shares of Ur-Energy closed 23¢ higher at $1.35. The junior has completed a 14-hole confirmation drill program at its Shirley basin project in Wyoming, which was part of its acquisition from an Areva affiliate in December 2013 of Pathfinder Mines Corp. Ur-Energy said the uranium grades it has encountered along with favourable hydrological characteristics of the host sandstones make the project a strong candidate for in-situ recovery.

Cerro Grande Mining soared 66.6% to 5¢ per share on the back of two announcements. In the first, Cerro Grande Mining said the Toronto Stock Exchange has deferred its delisting decision on the company until June 27. (If the TSX delists the company, Cerro Grande said it will seek a listing on the TSX Venture Exchange.) In the second, the junior reported that all paperwork relating to permitting the camp and plant buildings at its Pimenton mine in Chile have been filed with the government. A final inspection by the chief municipal building inspector is required before the mayor can approve reopening the mine, the company said.

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