TSX gains during Oct. 14–21 as inflation starts to slow

Markets were higher over the week as investors searched for a bottom to recent falls, anticipating that central banks won’t continue interest rate hikes for too much longer now that inflation is beginning to tick lower, in the United States and Canada at least. Gold retreated slightly.

The S&P/TSX Composite Index gained 534.6 points or 2.9% to 18,860.95. The S&P/TSX Global Mining Index increased 4.7 points or 5.3% to 93.77, and the S&P/TSX Global Base Metals Index gained 10.5 points or 6.8% to 163.88. The S&P/TSX Global Gold Index added 9.87 points or 4.3% to 239.41, and spot gold ended the week at US$6.05 per ounce lower, or 0.4%, at US$1,643.25 per oz.

Potash fertilizer producer Verde Agritech was the largest gainer in percentage terms over the week on the TSX, jumping by a third or $1.54 to close on Friday at $6.19. Perseus Mining added 18% to finish at $1.55.

Brazil-focused Verde Agritech said Oct. 19 it had solved water issues during the construction of access roads to its Plant 2 as the company targets total output of 700,000 tonnes of fertilizer by year’s end and 2 million tonnes next year. The water issues were first reported last month.

“Fortunately, the road issue did not damage human or environmental wellbeing and was surmounted quickly and definitely,” Verde founder, president and chief executive officer Cristiano Veloso said in a release. “Now we can put all our focus on achieving another year of record production and delivery.”

Verde, which is based in Belo Horizonte, Brazil, posted net profit of $12.6 million for the half year through June and started trading on the TSX in August at $8.70.

The company has a combined measured and indicated mineral resource of 1.5 billion tonnes grading at 9.28% potassium oxide, amounting to 295.7 million tonnes of potassium oxide.

The company says it is planning to build a third plant which aims to increase output by 10 million tonnes. It is currently licensed to make 2.8 million tonnes per year of its fertilizers.

Brazil is the second largest potash importer, behind the United States and ahead of China and India, according to the United Nations Food and Agriculture Organization. Brazil consumed 7.9 million tonnes of potash in 2021, according to an industry study.

Perseus Mining gained after it sold a 39% interest in Mako Gold’s flagship Napié Gold project in Côte d’Ivoire to Mako for a 2.9% stake in Mako and future payments of A$4.8 million ($4.1 million) depending on meeting resource and production targets.