TSX slips, Sept. 8-11

Canada’s main stock index fell 0.1% to 13,461.47 in the holiday-shortened trading week as Goldman Sachs trimmed its 2016 price forecasts for crude oil and the Bank of Canada said it would keep its key interest rate of 0.5% as the economy’s resource sector adjusts to lower oil, and other commodity prices. Goldman Sachs describes the oil market as “even more oversupplied than we had expected,” and forecasts the surplus will “persist” in 2016, mostly due to slowing demand in China. The Wall Street investment bank has cut its U.S. crude forecast for 2016 to US$45 per barrel from its previous US$57 estimate, and Brent crude from US$62 per barrel to US$49.50. The loonie closed at US75.45¢. Gold was down 1.4% to finish at US$1,107 per oz. The S&P/TSX Capped Diversified Metals & Mining Index rose 10.2% to 457.23, and the S&P/TSX Global Mining Index advanced 2.9% to 50.25.

First Point Minerals jumped 60% to 8¢ per share after the company said it would re-establish full ownership of its flagship Decar nickel project in central B.C. First Point will acquire 60% of the asset from Cliffs Natural Resources for US$4.8 million in cash. As part of the transaction, Cliffs will dispose all of its 14,353,190 shares in the capital of First Point in private transactions for $0.0515 per share. To finance the deal, First Point completed an arm’s-length loan with an individual shareholder of the company through which the lender will lend US$5 million to First Point for five years at a 6.5% headline interest rate.

Shares of Dominion Diamond advanced 63¢ to $15.61. The company reported a positive preliminary economic assessment of its fully permitted Sable pipe, beneath Sable Lake, 17 km northwest of the company’s Ekati mine infrastructure in the Northwest Territories. The PEA outlined a post-tax 17.3% internal rate of return. The pipe, which has 11.7 million carats in indicated resources, will be developed concurrently with the Jay pipe.

Agrium posted the largest gain, climbing $3.57 to $136.12 per share on no corporate news, and despite lower reported prices for potash (in the interior of North America, fertilizer prices fell 6.6%, according to Salman Partners). Agrium’s CEO Charles Magro acquired a reported 3,800 shares of the company on Sept. 4, marking a 36.5% increase in his equity holdings in the fertilizer company.

Shares of Potash Corp. of Saskatchewan fell 74¢ to $33.06. The company declared a quarterly dividend of US38¢ per share payable Nov. 3 to shareholders of record. The company also appointed Aaron Regent to its board of directors. Regent is the founding partner of Magris Resources and was previously president and CEO of Barrick Gold. He was also the former president and CEO of Falconbridge, and after its merger with Noranda, served as president of the combined company.