TSX climbs as economic outlook brightens

The TSX Composite Index gained 255 points for the Jan. 31- Feb. 4 period finishing at 13, 791.85 as economic indicators bolstered investor confidence.

Chief among the good signs was news that real GDP was up 0.4% in November and that economic growth in for the fourth quarter will likely meet the Bank of Canada forecast of 2.3%.

The other big news on the national economic front was employment jumping to begin the year as 69,000 new jobs were created in January.

The price of gold showed renewed signs of life as it was up US$22 to US$1,355.00 sending the Global Gold Index was up 14 points to 385.85.

The Capped Metals & Mining Index moved 66 points higher to 1,566.90 as the prices for copper, aluminum, nickel, lead and zinc all made gains while the price for tin continued on its historic run, finishing the period at US$14.01 per lb.

Just a month after releasing an interim resource estimate for its Long Canyon project, Fronteer Gold looks set to be acquired by Newmont Mining. The offer from Newmont would see Fronteer Gold’s shareholders get $14 in cash and one common share in a new company called Pilot Gold for each Fronteer common share. Fronteer’s latest resource estimate put 1.4 million oz. in the measured and indicated resources and another 800,000 oz. in the inferred category. Word of the deal sent the company’s shares up 44% to $14.33.

The initial drill results from Talon Metals’ Trairão Iron Project in Brazil’s Pará State came in and they didn’t disappoint. The company’s shares were up 32% to $2.12 for the period after releasing numerous wide and high-grade intercepts. Some of the most impressive included 50 metres grading 41.07% iron and 46 metres grading 48.66% iron.

The Lundin Legacy is coming to Zazu Metals, and the market signaled its approval. Zazu was up 32% to $1.39 for the period in which it announced that Zebra Holdings – a company owned by a trust settled by the late Adolf Lundin – was taking a 19.9% stake in the company by buying 8.8 million Zazu shares for 90¢ per share. The private placement will raise close to $8 million for Zazu which it says will go towards completing a feasibility study on its Lik South deposit in north west Alaska. Teck is Zazu’s joint venture partner at the project with each company holding a 50% stake.

And Crystallex International may finally have been put out of its misery in its dogged attempt to mine the Las Cristinas gold project in Venezuela. The company said it received a letter from the government terminating its mining contract for Las Cristinas. The letter said the termination was due to a lack of activity at the project and “for reasons of opportunity and convenience.” Crystallex shares were down 15% to 22¢ for the period.