TSX struggles, Sept. 15-19

The S&P/TSX Composite Index fell 266.23 points, or 1.71% to 15,265.35, while the S&P/TSX Capped Diversified Metals & Mining Index plunged 7.7%, or 67.86 points, to finish the week at 813.12. The S&P/TSX Global Mining Index dropped 3.56 points, or 4.6%, to 73.90; and the gold price declined 1%, or US$12.10 per oz., to US$1,216.20 per oz.

Potash Corp. of Saskatchewan rose 62¢ to $38.68. The company released its third-quarter market analysis in which it said record potash demand in the first half of 2014 resulted in most producers running at or near estimated operational capacity. The company estimates that operating rates exceeded 90% of the world’s operational capacity in the first half, which would be near the five-year high, and said it expects tight potash supply for the rest of the year.

Teranga Gold was the most traded stock, with shares falling 3¢ to 80¢. The company operates the only large gold mine in Senegal and said it’s on track to meet the lower end of its yearly production guidance of 220,000 to 240,000 oz. gold. It anticipates a strong fourth quarter with 75,000 to 80,000 oz. gold, partly due to softer, high-grade ore from its Masato pit, which was mined for the first time on Sept. 2. Masato is expected to contribute 20,000 oz. to fourth-quarter production and be the main source of production in 2015. The company also expects to receive all the permits to develop the Gora deposit by the end of October, with production expected in the third quarter of 2015. Teranga anticipates it will finish the year debt-free with between $25 million and $35 million in cash, and generate free cash flow by 2015.

News that Balmoral Resources would be added to the S&P/TSX SmallCap Index helped guide the junior’s shares up 27¢, or 20%, to $1.65 per share. The index is made up of 210 TSX-listed companies.

Premier Gold Mines, meanwhile, advanced 18¢ to finish at $2.85 per share on drill results from its Hardrock project in Ontario. High-grade intercepts within the primary resource include 10.15 grams gold per tonne across 3.1 metres, 25.93 grams gold across 2.5 metres and 5.75 grams across 9.9 metres.

OceanaGold fell 23% to $2.07 per share. The company confirmed that it had felt out a business combination with Alacer Gold in February. “Our interest in looking at merger and acquisition (M&A) opportunities … is well-known by the market,” Sam Pazuki, OceanaGold’s manager of investor relations, wrote in an email to The Northern Miner. “We have had discussions with a number of different parties about potential M&A transactions … we have approached Alacer on a number of occasions to discuss a potential transaction. The last such instance was awhile back, and as stated, they were not interested in engaging with us.”

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