TSX dips a little, May 12-16

The S&P/TSX Composite Index has risen by more than 7% so far this year, but Canada’s main stock index fell 19.32 points to 14,514.74 during the trading week. The S&P/TSX Capped Diversified Metals & Mining Index rose 22.08 points to 863.26, while the S&P/TSX Global Gold Index fell 2.69 points to 177.01. The New York spot price of gold slid US$2.60 to finish at US$1,290.10 per oz.

Shares of Hudbay Minerals climbed 82¢ to $10 per share. After markets closed on May 16, the company extended its offer for Augusta Resource to May 27, 2014. Hudbay said it is “assessing, among other things, the potential implications of a letter dated May 13, 2014, that the U.S. Army Corps of Engineers (UACE) is reported to have sent to Augusta.” Hudbay said the USACE letter “advises Augusta that, in the context of its Clean Water Act Section 404 permit application, Augusta’s proposed compensatory mitigation is inadequate, and USACE staff is changing its focus from compensatory mitigation to preparing a final permit decision.”

Balmoral Resources surged 25.5% to $1.08 after the junior explorer released intercepts from the winter drill program at its Martiniere gold project in Quebec. The results included an intercept of 1,138 grams gold per tonne over 4.9 metres from the Bug Lake footwall zone, which included a record intercept of 9,710 grams gold per tonne over 0.6 metre.

Yamana Gold was the most traded stock, climbing 17¢ to $8.04. The company announced the appointment of industry veteran Daniel Racine as senior vice-president of Canadian operations and mine planning and development. Racine was previously president and chief operating officer for Brigus Gold, and served as president of mining at Agnico Eagle Mines. In April, Yamana Gold and Agnico Eagle agreed to acquire 100% of Osisko Mining in a deal worth $3.9 billion, trumping an earlier bid for the company from Goldcorp.  

Coalspur Mines was the second most actively traded of the week, down 53.1% to 8¢ after the company announced mid-week that it would no longer start building its Vista coal project in Alberta’s Hinton region in June, due to delays in securing needed financing and permits for developing phase one. The company said it was in “advanced discussions with potential strategic investors.” The Alberta Energy Regulator approved Vista in February and issued a mine permit, processing plant approval, and pit and dump licences. Coalspur said it is working to get its remaining permits and licences.

Shares of First Nickel fell 30% to 4¢. The company reported a first-quarter net loss of $9.3 million on $16.8 million in revenue. Total cash production costs were $12.8 million. Its Lockerby mine produced 2.7 million contained lb. nickel and 1.7 million contained lb. copper in the first quarter.  Two drillers were killed at Lockerby in May, and mining was suspended for two days.

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