TSX continues its slide despite gold’s shine

The August 15-19 period brought more hard times for Canadian investors as the TSX Composite Index resumed its downward plunge, falling 619 points to finish just a shade above the 12,000 mark at 12,007.47 points.

The lone feel-good story was that of gold, as the precious metal continued to shine bright as the global economy whimpered and wobbled around it. The metal finished the period at US$1,852.20 – good enough for a 6% or US$105 gain per oz.

The bad news for investors who choose to play the metal price via miners, was that such historic gains weren’t, for the most part, passed on to the companies that mine the metal. Investor preference continued to be restricted to the metal itself as evidenced by the Global Gold Index only climbing 15 points to 413.45 points – a 3.8% gain.

Still, holding gold miners was a better business than holding miners of others metals. The Capped Metals & Mining Index was off 135 points to 1,096.49 as fears of a global recession brought the prices for copper, aluminum, nickel, tin and lead lower.

Lake Shore Gold shares shot up 19% to $2.29 for the period after it said that it had extended gold mineralization 400 metres below its current resource. The company said the results could add to the resource base at Bell Creek Complex and that the structures remain open to depth and along strike. The results came out of 22,479 metre of drilling.

The drill bit was also kind to Claude Resources, as a possible new gold zone at its Seabee Gold Mine sent its shares 18% higher to finish at $1.86. Highlights from the program included 8.81 grams of gold over 4.9 metres and 6.9 grams gold per tonne over 10 metres. Claude said the results point to the discovery of a new gold-bearing structure and said it will drill 86,500 metres at the site this year.

The period wasn’t so kind to Labrador Iron Mines. The company, which reported its first quarter financial results in the period, saw its share price drop by 20% to finish at $7.88. The company’s financial results included a loss of $4.7 million, or 9¢ per share, compared to a loss of $900,000 or 2¢ per share for the first quarter of the prior year. The company blamed increased losses on a $3.5 million transportation expenses. That cost was paid out prior to the company establishing full scale transportation of iron ore to the port.

Noventa also fell on hard times as the company’s shares were off 20% to 49¢ after announcing a financing deal that sold its share for less than their current market value. The deal called for the issuance of 73.6 million shares for 25 British pence, which equates to roughly 40¢ in Canada – the price where its shares were migrating to. Noventa said the roughly $30 million financing would let it complete the construction and commissioning of the expanded plant at its Marropino mine by the end of 2011.