U.S. equities remain positive, Jan. 7-11

U.S. equities remained resilient in the wake of the Jan. 2 settlement of the fiscal cliff debate, but the rally slowed slightly ahead of earning season. The Dow Jones Industrial Average gained 0.4% to close at 13,488.43, while the S&P 500 index also rose 0.4% to finish at 1,472.05. The Philadelphia Gold and Silver index gained 0.5% to 163.36.

Topping the list of percentage gains was Uranium Resources, which climbed 38.6% to US$0.50 per share. The company announced it had extended and expanded its South Texas exploration agreement with Cameco Texas, a subsidiary of Cameco Corp. Both parties agreed to extend the exploration agreement to a five-phase, five-year exploration program that will include Tecolote, a 22,700-acre tract of land in South Texas. Cameco also committed US$4.3 million to increase its interest to 70% in the expanded program and will fund and be the exploration operator for Phase III of the project.

Results of a feasibility study for the Casino copper-gold-molybdenum deposit in the Yukon sent shares of Western Copper up 27% to US$1.69. The project carries an after-tax net present value at an 8% discount rate of $1.83 billion at long-term metal prices of US$3 per lb. copper, US$1,400 per oz. gold, US$25 per oz. silver and US$14 per lb. molybdenum. The after-tax internal rate of return was estimated at 20.1%. The deposit has proven and probable reserves of 8.9 million ounces of gold, 4.5 billion pounds of copper, 483 million pounds of molybdenum and 65 million ounces of silver. The project is planned as an open pit operation with a concentrator processing 120,000 tonnes per day plus a gold heap leach facility processing 25,000 tonnes per day.

Molycorp fell 17.6% or US$1.82 to close the week at US$8.48 per share, after it announced on Jan. 10 that a decision to complete Phase II of its Mountain Pass rare earths mine “will not be made until market demand, product pricing, capital availability and financial returns justify additional increases in production beyond Phase I.” The Mountain Pass complex is designed to be able to allow for expanded production at a Phase II rate of as much as 40,000 tonnes a year of rare earth oxide equivalent. The company also said controlling capital and operating costs remains a top priority and that it expects lower than expected revenue and cash flow in 2013. Management also said it is evaluating its 2013 capital needs.