TSX drops, March 2-6

Canada’s main stock index was in the red during the week of the Prospectors & Developers Association of Canada convention, with the country reporting lower gross domestic product growth in the fourth quarter and a worsening trade deficit in January. Fourth-quarter GDP grew at an annualized pace of 2.4%, compared with 3.2% growth in the third quarter, while lower oil prices pushed the country’s trade deficit in the month of January to a 2.5-year high of $2.5 billion, up from $1.2 billion in December. The S&P/TSX Composite Index fell 1.9% to 14,952.50 and the S&P/TSX Capped Diversified Metals & Mining Index dropped 6.6% to finish at 681.69. The gold spot price fell US$45 per oz., or 3.7% to US$1168.70, and the S&P/TSX Global Gold Index plunged 11.7% to 160.73.

Marengo Mining, SouthGobi Resources and Dominion Diamond led the week’s percentage gains. Marengo’s shares jumped 100% to 1¢ after the company said it began exploration at its Rima prospect in Papua New Guinea, west of its flagship Yandera copper project. The junior recently completed four drill holes at Rima and says it soon expects to finalize its 2015 exploration program. SouthGobi, meanwhile, completed the first US$3.5-million tranche of a previously announced private placement, sending the coal miner’s shares up 49¢, or 81.6% to $1.09.

Dominion Diamond advanced 34¢ to $21.37. The company updated reserves and resources for its 40%-owned Diavik mine, adding another 3.9 million tonnes containing 13 million carats to its reserves. As of Dec. 31, 2014, Diavik had 18.1 million tonnes of proven and probable reserves containing 53.3 million carats of diamonds (compared to 16.4 million tonnes of proven and probable reserves containing 46.8 million carats as of Dec. 31, 2013). At the A-21 pipe, 3.7 million tonnes containing 10 million carats has been promoted to proven reserves. At the A-154 North pipe, 0.2 million tonnes of inferred resources at depth were promoted to probable reserve status. Within the remaining reserve at the A-154 North pipe, 0.5 million tonnes were promoted from probable to proven reserve. Diavik also has 3.1 million tonnes of inferred resource, of which 2.4 million tonnes are distributed among the lower parts of A-154 South, A-418 and A-154 North. The A-21 pipe will undergo development this year, with the dyke built in 2016 and 2017, and pit pre-stripping in 2018.

Uncertainty in Greece sent shares of Eldorado Gold down 63¢ to $6.09. The company updated shareholders on its Skouries project on March 2, after the Ministry of Productive Reconstruction, Environment and Energy revoked the approval to complete construction of Eldorado’s processing plant on Feb. 25. CEO Paul Wright said the decision “if not reversed in a timely manner — may force Eldorado to reconsider its investment plans for Greece.”