US equities dip slightly, Sept. 17-21

 While the S&P 500 remained near highs not seen since December 2007 after the European Central Bank announced its bond-buying plan on Sept. 6 and the U.S. Federal Reserve followed a week later with a third round of quantitative easing, U.S. equities closed slightly lower during the Sept. 17-21 trading week as fears started to resurface about weak economic growth, high unemployment, upcoming third-quarter earnings season, and the euro zone’s ability to resolve its debt crisis. The Dow Jones Industrial Average closed 65.16 points or 0.48% lower at 13,528.21, while the S&P 500 slipped 11.03 points or 0.75% to 1,454.74. The Philadelphia Gold and Silver index edged 0.03 points or 1.12% lower to 191.94.

Alpha Natural Resources was the most actively traded stock following news of a plan to reshape the company’s mining operations by focusing on the metallurgical coal business, cutting overhead costs by US$150 million, and trimming annual coal output by about 16 million from early 2013. About 40% of the reduction will come from higher cost thermal coal operations in the Eastern U.S. that are “unlikely to be competitive for the foreseeable future,” the company announced on Sept. 18. Shares of Alpha closed US$1.34 or 15.6% lower at US$7.21.  

A positive preliminary economic assessment of New Gold’s Blackwater gold project in central British Columbia sent the company’s shares up US$0.87 to US$12.72. Over its initial 15-year mine life, the study estimated that Blackwater would produce an annual average of 507,000 oz. gold and 2.04 million oz. silver at total cash costs per oz. sold, net of byproduct sales, of US$536 per oz. Construction is forecast to start in 2015 with first production in 2017.

Cornerstone Capital Resources shot up 63.7% to US$0.11 per share on news that it had signed a letter of intent with Benton Resources for the 51 Zone and the Windowglass Hill deposits on its Cape Ray gold-silver property, about 25 km northeast of the town of Port aux Basques in southwestern Newfoundland. Under the terms of the agreement Benton can earn up to a 75% interest in the two deposits. In July Cornerstone reported inferred resources for the 51 Zone of 530,000 tonnes grading 6.10 grams gold per tonne and 15.86 grams silver per tonne and at Windowglass Hill an inferred resource of 1.81 million tonnes grading 1.77 grams gold and 11.28 grams silver. Mineralization is relatively shallow, at a maximum of 270 metres vertically below surface for the 51 Zone and 140 metres for Windowglass Hill.