TSX rebounds with strength over July 5-9

The TSX Composite Index showed signs of life again finishing 400 points higher for the July 5-9 period as it ended the week at 11,600 points. It was one of the strongest periods for the Index this year as investors began to believe that the debt crisis in the Europe could be heading towards a close.

It was a stronger period for the diversified miners as well, as the prices of copper, aluminum, nickel, tin, lead and zinc all rose. That helped bolster the Capped Metals & Mining Index by roughly 100 points as it wound the period up at 896 points.

Lundin Mining was the greatest beneficiary of the turn for the better in base metal prices as the company, which had been on a considerable slump with its share price falling from the $5.50 mark in early April to the $3.00 level in late June, rebounded and gained 25% for the period to finish at $3.78.

Unfortunately for Gold Bugs, the yellow metal didn’t perform so well. The Global Gold Index finished the period flat at 364 points after as the price of gold fell back with the strengthening of the US dollar.

Despite gold’s lack of strength, however, Crocodile Gold managed to propel itself up the market as it gained 27% to finish the period at $1.28. The upward mobility came courtesy of drill results from its Howley project in Australia. Highlights from drilling included 13.36 grams gold over 5 metres. The company also announced it had struck numerous wider mineralized zones down dip form existing resources.

The new wasn’t as good for Forsys Metals as it saw its share price fall by 32% for the period after announcing that it had not been able to come to any terms with a prospective buyer of the company. Morgan Stanley launched a strategic review of the company back in October or last year shortly after a deal with George Forrest International (GFI) fell through. GFI was set to buy all of Forsys’ outstanding shares for $7.00 before the government of Canada got involved and scuttled the deal. Forsys shares finished the period trading for $1.51.

It was also a tough period for New Gold, which lost an appeal against a Mexican court ruling. The original ruling cancelled a 2006 environmental impact study on its Cerro San Pedro mine in central Mexico. The decision had the mid-tier producer’s shares falling 16% for the period finishing at $5.40. Back in September of last year a Federal Court ruled that the mine’s environmental impact assessment should be cancelled. A few months later, however, another court granted an injunction allowing the mine to remain fully operational since then.

New Gold says it will file an appeal as it says Cerro San Pedro complies with the highest environmental standards and should stay open for the benefit of the local economy. The company says the legal dispute has to do with a land-use dispute and not environmental issues.