TSX moves still higher on commodity strength

TSX Composite Index continued to beef-up thanks in large part to its strong ties with the commodities sector. For the Oct. 4-8 period the Index managed to gain 160 points to finish up at 12,535.59 points.

The Canadian dollar strengthened against the U.S. greenback but fell against other major currencies. That discrepancy was attributed to, on one hand, the likelihood of more quantitative easing in the States but on the other, the Canadian economy’s tight connection with the US economy and its sluggish growth prospects.

Bad employment numbers in the U.S. were behind the belief that more loose money policy was coming from the Fed, so it wasn’t surprising to see gold continue to venture towards new heights. The metal was up US$35 to finish at US$1,351.50 but the Global Gold Index failed to reflect that enthusiasm as it fell, if only slightly, by 3 points to finish at 397.83.

The Capped Metals & Mining Index, however, showed no divergence from its underlying commodities. The Index continued on its steep upward trend as it added another 31 points to finish at 1,197.15 points in a period in which the prices for copper, aluminum, nickel, tin, lead and zinc were all higher.

High grade assay results from its Accha Zinc Oxide District in southern Peru made Zincore Metals one of the market’s more favoured stories for the period. The company was up 67% to 60¢ after announcing highlights including 20.12 % zinc over 36.1 metres, 11.42 % zinc over 22.70 metres, 18.51% zinc over 12.3 metres and 18.53% zinc over 21.35 metres. The company plans to finish drilling at the end of October after which it will work towards generating a technical report on the project.

The drill was also kind to South American Silver as the company climbed 43% to finish the period at $1.00 after reporting extremely wide intercepts from its Malku Khota silver-indium project in Bolivia. Highlights included 286.4 metres grading 75.8 grams silver equivalent, 318 metres grading 150.5 grams silver equivalent and 202 metres grading 113.5 grams silver equivalent. The company says it has drilled 6,000 meters of the 11,500 meter drilling campaign for this year that is made up of infill and exploration drilling.

Crocodile Gold poured a record of amount of gold in September and the market rewarded the company with a 34% boost to its share price as it finished at $1.49. The company said it poured 10,024 oz. of gold for the month and is on track to produce 85,000 oz. for the year. Crocodile is producing gold from three open pit mines and one underground mine, all of which are in Australia’s Northern Territory.

And a take-over bid for GlobeStar Mining had that company’s shares up 34% to $1.58 for the period. The offer comes from Australian-based, but majority Chinese owned, Perilya Limited, and is for $1.65 per share – a 30% premium. GlobeStar’s board said it fully supported the bid, which its shareholders will have 35 days to accept.