TSX Venture falls alongside commodities, Apr. 8-12

VANCOUVER — The S&P TSX Venture Composite Index followed commodities downward during the Apr. 8-12 trading period, dropping 1.8% or 19.24 points en route to a 1,022.61 point weekly close.

Markets were hampered by ongoing uncertainty in the European Union — with Cypriot President Nicos Anastasiades stating he would be asking for more assistance from Eurozone authorities — as well as falling commodity prices and a weak March employment report in the U.S.

Unemployment statistics in the U.S. provided a bit of positive news, with citizens seeking unemployment benefits falling 42,000 last week to a seasonally adjusted 345,000, comparing favorably an expected range of roughly 360,000.

Meanwhile trade data from China suggested its manufacturers could be looking to increase buying activities, with the world’s second-largest economy posting a US$800 million trade deficit in March as imports jumped roughly 14% compared to a 5% combined increase in January and February.

Gold continued to tumble this week, impacting stocks across Canada’s junior mining sector, with June contracts for bullion dropping nearly 6%, or US$89.20, before closing out the week at US$1,482.65 per oz. Copper took a step back, with May contracts for the red metal dropping US1.2¢ en route to a US$3.34 per lb. weekly close.

The energy sector also struggled after the International Energy Agency dropped its projection for global crude oil demand in 2013 to 90.6 million barrels a day — a decline of roughly 45,000 barrels daily. May contracts for crude oil dropped 2.8% or US$2.61 before closing out the week at US$90.86 per barrel.

Not surprisingly it was a particularly rough week for junior gold companies. Mexico-focused explorer Chesapeake Gold lost 64¢ during the period, dropping nearly 10% before closing the week at $6.15 per share. The company recently released a prefeasibility study on its gold-silver Metates gold proejct in Durango State, Mexico. Toronto-based Atacama Pacific Gold and its Cerro Maricunga oxide-associated gold project in Chile also struggled, as its shares dropped 37¢ en route to a $1.59 weekly close.

The story was similar for Vancouver-based GoldQuest Mining, which released assay results from eight drill holes on its 100%-owned Las Tres Palmas gold trend in the Dominican Republic. GoldQuest lost 15¢ during the week before closing at 28¢ per share. The fall caps off a rough start to 2013 for the company, which is down roughly 55% or 36¢ per share since early January.

GoldQuest’s drilling focused on the lower-chargeability areas around the periphery of its Romero anomaly, with highlights including: 15 metres grading 0.36 gram gold per tonne from 354 metres depth in hole LTP-125, 42 metres of 0.57 gram gold from 92 metres depth in hole LTP-128, and 10 metres of 2.72 grams gold from 79 metres depth in hole LTP-130.

Though volume was a bit hard to come by on the Venture last week, Vancouver-based Victoria Gold traded an active 5.3 million shares during the period and managed a 3¢ gain en route to a 24¢ per share close. The company continues to ride momentum following news that the Yukon government has moved its Eagle Gold project to the final permitting stages.

On Apr. 8 Victoria released the text of the Yukon government’s decision, which allows the company to move forward with its project and apply for the necessary licences: a water licence from the Yukon Water Board and a Quartz Mining Licence from the Department of Energy, Mines and Resources.