Toronto Stock Exchange
It was queasy ride for investors over the May 2-6 period, as the S&P/TSX composite index fell 383 points to end at 13,601.49.
The drop was severe enough, and accompanied by enough volume, to ignite worries that a significant correction to the recent run-up in commodities and equities could be underway.
The fall came after the week started out promising enough. First there was the killing of Osama bin Laden, and then there was a majority victory for the Conservatives in Canada that promised to bring more certainty to the market. Neither event proved too beneficial to the markets.
With the price of oil moving below US$100 per barrel, the Canadian dollar fell in lockstep until stronger-than-expected Canadian employment reports offered support and the loonie settled at $1.04 U.S. by week’s end.
The fall in the Capped Metals and Mining index – an 80-point drop to 1,405.74 – reflected concerns about global demand. The prices for copper, aluminum, nickel, tin, lead and zinc were all lower.
Gold’s stay above the US$1,500-per-oz. level proved to be brief as the yellow metal fell by US$75 to close out the period at $1,491.00, taking the Global Gold index down with it as it fell 30 points to 374.10.
But the woes of gold investors were only amplified in the silver subsector, as the metal fell a dramatic 27% to finish the period at just US$35.29 per oz. That downward pressure exhibited exceptional force on silver miners, with Silvermex Resources, Silver Wheaton and Silver Standard Resources hit hard.
But the dark period for miners didn’t descend without some shining stars. Vena Resources gained 18.5% to finish at 32¢. The uptick came on word that the Peruvian government had approved the environmental impact assessment on the company’s Azulcocha project. The company said that it and its partner Trafigura are pushing ahead on construction of the mine.
Niocan‘s shares jumped 17% to $1.15 after announcing a private placement with Stan Bharti’s Forbes & Manhattan at a 15% premium to its closing price on May 3. Niocan will issue roughly 5 million shares at $1.15 apiece. The money will be used to pay operating costs and to develop a pipeline of niobium assets.
Extract Resources rose 12% to $8.05 on the back of an announcement from Kalahari Minerals that CGNPC Uranium Resources is negotiating a cash offer for Kalahari with the deadline for a firm offer being extended to June 17. Kalahari holds a 42.76% stake in Extract, and a takeover by CGNPC could well result in a downstream offer for Extract. Extract’s flagship asset is the advanced Husab uranium project in Namibia, where efforts are underway to expand the resource base.
TSX most active issues
VOLUMEWEEK
(000s)HIGHLOWCLOSECHANGE
Equinox MinlsEQN688028.128.088.100.00
Lundin MngLUN314699.278.738.99-0.27
Kinross GoldK2877815.0914.1214.54-0.46
Uranium OneUUU265214.493.924.13+0.19
Barrick GoldABX2158148.3144.9145.42-2.90
GoldcorpG1997952.6246.6147.36-5.53
Silver WheatonSLW1648637.8933.3434.64-3.86
Yamana GoldYRI1636812.2511.3411.43-0.63
Eastern PlatinELR150141.171.031.07-0.08
Carpathian GldCPN148150.440.390.43-0.01
TSX greatest percentage change
VOLUMEWEEK
(000s)HIGHLOWCLOSECHANGE
Vena ResVEM16860.330.250.32+18.5
Niocan IncNIO3241.180.971.15+17.3
Horizns G BearHGD516810.869.1610.64+15.7
Extract ResEXT288.487.008.05+12.4
BRC DiamondCrBCD8060.130.080.10+11.1
Crystallex IntKRY6180.130.120.13+8.3
Canarc ResCCM3520.160.140.15+7.1
Gryphon GoldGGN8080.170.140.16+6.6
Thundermin ResTHR2060.170.150.17+6.2
Nuinsco ResNWI13050.180.150.18+5.8
Ram PowerRPG118230.710.490.50-28.5
Sprott Ph SilvPHSU160421.5015.0015.76-27.2
Mines ManagmntMGT292.702.152.15-23.2
Silvermex ResSLX46010.820.660.68-21.8
Revett MnlsRVM8745.624.234.53-21.2
Khan ResKRI2240.370.310.32-20.0
MinefindersMFL292015.9812.6112.78-19.6
Richmont MinesRIC12299.376.867.48-18.7
Allied NevadaANV117340.9032.8133.27-18.6
US GoldUXG6588.867.187.27-18.4
TSX greatest value change
WEEK
VOLUMECLOSECHANGE
Horizns G BearHGD516833310.64+1.45
Centerra GoldCG180487518.60+1.00
Extract ResEXT284558.05+0.89
Uranium ParticU26971106.81+0.22
Uranium OneUUU265208864.13+0.19
Niocan IncNIO3244451.15+0.17
OrocobreORL1001662.65+0.10
Romarco MnrlsR66472521.89+0.09
SemafoSMF84367028.12+0.08
NGEx ResNGQ20398733.39+0.08
First QuantumFM1886030123.72-11.11
Allied NevadaANV117287133.27-7.60
Labdr I-Ore RoLIF_U53563767.00-7.40
Sprott Ph SilvPHSU160394115.76-5.89
GoldcorpG1997883047.36-5.53
Agnico-EagleAEM459887260.70-5.22
AgriumAGU548018281.55-4.21
Silver WheatonSLW1648601634.64-3.86
Silver Std ResSSO168000829.08-3.83
Tahoe ResTHO388374317.84-3.68
TSX Venture Exchange
A big commodities sell-off, including the biggest drop in silver futures in thirty years, led to a rough May 2 to 6 period on the TSX Venture Exchange. The board’s index dropped 204.34 points in the first four days before making a moderate recovery of 40.81 points to end at 2,088.60, erasing any gains made since mid-December. The downward trend led to 110 Venture-listed companies hitting 52-week lows and only 29 hitting 52-week highs.
Great Quest Metals saw the biggest price jump, up 22¢ to $2.91. The Mali-focused phosphate and gold explorer did not release news during the period, and the gains put it back in line with its mid-April price. Great Quest controls the 737-sq.-km Tilemsi phosphate project in eastern Mali and the Sanoukou gold project that sits immediately south of the Djambaye II zone, which it sold to Avion Gold in late 2009. The company recently initiated a 2,500-metre drill program at Sanoukou.
A re-branded Mesa Exploration released a technical report on it three potash projects in Utah. The report stated that there is a very large tonnage of potash in several beds, established through at least 32 oil and gas test wells. Mesa’s share price climbed 20¢ on the news for the second-best value gains of the period, ending at 92¢. The company changed its name from Mesa Uranium to Mesa Exploration in March to reflect its recently-acquired potash and lithium projects.
Hunt Mining was one of the few stand-outs during the period, climbing 13¢ for a 39% gain and ending at 46¢ on 4.6 million shares traded. The climb followed the company’s release of drill results from its La Josefina gold project in Argentina’s Santa Cruz province. Highlights included 19.5 metres grading 18.83 grams gold per tonne, 3.5 metres averaging 4.83 grams gold, 7 metres carrying 3.01 grams gold and 1 metre grading 40.97 grams gold. The intercepts were all estimated at true widths and contained silver, copper, lead and zinc.
Of the ten most-traded stocks on the Venture, IBC Advanced Alloys, was the only one that did not end into the red. Instead, the company had a 4¢ up-down swing to end flat at 20¢ after rounding, with 10.5 million shares traded. IBC is exploring for and developing beryllium aluminum alloys, which have a very high melting point and are used as a shield in nuclear reactors, among other applications. The company has beryllium projects in Utah and Colorado, and four manufacturing plants in the U.S.
Ethos Capital ended up 15¢ at $1.32 after closing two private placements that totalled almost $15 million. The funds are earmarked for exploring gold projects in the Yukon and its silver projects in Mexico. Ethos is advancing, among other properties, the Hen, Wolf, Bridge and Betty properties in the White Gold district.
TSX-V most active issues
VOLUMEWEEK
(000s)HIGHLOWCLOSECHANGE
Great WesternGWG114220.820.740.77-0.03
Aurcana CorpAUN110540.850.680.72-0.16
IBC Adv AlloysIB105410.230.170.19+0.01
Copper Fox MtlCUU97252.421.912.02-0.40
Abcourt MinesABI86900.160.110.13-0.02
US SilverUSA70400.660.530.57-0.07
Cobalt CoalCBT66540.090.030.04-0.05
Orbite Expl AORTA65814.663.863.99-0.48
Seafield ResSFF63330.270.230.23-0.02
Creston MolyCMS61490.600.530.55-0.03
TSX-V greatest percentage change
VOLUMEWEEK
(000s)HIGHLOWCLOSECHANGE
Megastar DevMDV2400.120.030.12+300.0
Tanqueray ResTQY15310.030.020.03+50.0
Global HunterBOB18570.120.080.12+50.0
Delta UraniumDUR3570.030.020.03+50.0
Hunt MngHMX46340.470.250.46+39.3
African MetalsAFR11240.340.240.32+39.1
JiminexJIM24890.220.140.20+33.3
Groundstar ResGSA20780.350.230.31+29.1
Panoro MinlsPML7550.540.380.54+28.5
Ring of Fire RROF19450.180.140.18+28.5
Cobalt CoalCBT66540.090.030.04-55.5
White Tiger MgWTC23610.470.280.30-36.1
Tawsho MngTAW1000.170.130.13-35.0
Rainy Mtn RoylRMO5030.220.140.15-34.7
MazarinMAZH1740.050.040.04-33.3
Pac Arc ResPAV960.300.220.22-31.2
Alexander MngAXD230.160.160.16-30.4
Knick ExplKNX15230.200.130.14-30.0
Wesgold MnlsWSG160.470.330.33-29.7
Midasco CapMGC2190.150.120.12-29.4
TSX-V greatest value change
WEEK
VOLUMECLOSECHANGE
Great Quest MeGQ4507692.91+0.22
Mesa UranMSA1540630.92+0.20
Ethos CapECC22085791.32+0.15
Hunt MngHMX46342920.46+0.13
Rio Alto MngRIO29170762.11+0.12
Panoro MinlsPML7547000.54+0.12
Dia Bras ExplDIB1345842.71+0.10
African MetalsAFR11242350.32+0.09
Focus MetalsFMS25457870.94+0.09
Lago Dourado MLDM1487190.89+0.09
Richfield VentRVC5359238.60-1.09
Quest Rare MnlQRM25737017.08-1.07
Rainy River RsRR8244518.90-1.00
Tasman MetalsTSM16796214.57-0.98
Rare Elemnt RsRES78285612.70-0.92
Mirasol ResMRZ9946345.19-0.83
Maudore MinlsMAO1519705.85-0.79
Bear Creek MngBCM26694627.50-0.79
Lumina CopperLCC2935046.30-0.71
New Millen CapNML38401602.45-0.70
U.S. MARKETS
U.S. equities posted heavy losses as commodities plunged and economic data showed weekly applications for unemployment insurance rose to an eight-month high. The Dow Jones industrial average dropped 171.8 points to close the April 29-May 6 trading week at 12,638.74, while the S&P 500 index slid 23.41 points to 1,340.20.
Few were spared from the sharp sell-off. Shares of Alliance Resource Partners, a diversified coal producer, fell US$8.48 to US$72.99 per share, despite posting record first-quarter results the previous week. Increased coal sales volumes and record average realized pricing drove revenues to a record US$423.3 million, an increase of 11.2% compared to the year-ago quarter.
On the precious metals front, Allied Nevada tumbled US$8.71 to US$34.35 per share. Disappointing first-quarter results released on May 5 didn’t help. Net income totaled US$0.2 million compared with net income of US$3.7 million for the same period in 2010. Agnico-Eagle Mines lost US$6.93 to US$62.65 on no news, while Goldcorp was down US$6.91 to US$48.92. Goldcorp reported first quarter revenues jumped 69% over the 2010 first quarter, to US$1.2 billion, on gold sales of 627,300 oz.; operating cash flow increased 108% year-on-year to US$586 million or US73¢ per share; and adjusted net earnings surged 150% to US$397 million or US50¢ per share. Silver Wheaton dropped US$4.80 to US$35.82 per share, despite announcing its second quarterly cash dividend payment for 2011 of US3¢ per share.
International Coal Group advanced 31% or US$3.42 to US$14.45 per share, after agreeing on May 2 to be bought by Arch Coal for US$3.4 billion. The combined company will be the second-largest U.S. metallurgical coal supplier and a top-five global coal producer and marketer.
OM Group added US75¢ to close the week at US$36.99 per share, after reporting net income was $30.7 million in the first quarter compared with $22.6 million during the year-ago period. Freeport McMoRan Copper & Gold was the fourth most actively traded stock, closing at US$50.17 apiece, down US$4.85 on no news.
U.S. most active issues
VOLUMEWEEK
(000s)HIGHLOWCLOSECHANGE
Intl Coal Gp*ICO32390914.5014.3814.45+3.42
Alcoa*AA22056917.9616.8317.15+0.15
Silver Wheatn*SLW11932039.9534.3435.82-4.80
Freeport McMo*FCX10733255.5749.4150.17-4.85
Hecla Mining*HL779099.417.858.09-1.32
Barrick Gold*ABX6264351.0046.2546.84-4.17
Goldcorp*GG5584155.5448.0048.92-6.91
Kinross Gold*KGC5500115.8614.5315.01-0.83
Potash C Sask*POT4484157.3451.7753.45-2.93
Central Fund*CEF4156024.0619.6221.08-3.47
U.S. greatest percentage change
VOLUMEWEEK
(000s)HIGHLOWCLOSECHANGE
Intl Coal Gp*ICO32390914.5014.3814.45+31.0
Linux Gold*LNXGF510.050.040.05+25.0
Tara Gold*TRGD2500.350.290.33+13.7
Crystallex In*KRY18190.140.130.13+8.3
OM Group*OMG163038.1334.3636.99+2.0
Alcoa*AA22056917.9616.8317.15+0.8
SinoCoking Cl*SCOK34278.046.416.45+0.7
Elray Res*ELRA10690.020.010.01-50.0
Contintl Mnls*KMKCF342.711.061.80-33.8
Mines Managem*MGN15642.852.202.20-24.4
Minefinders*MFN680916.8513.0113.14-21.6
Richmont Mine*RIC51239.887.067.72-20.6
Allied Nevada*ANV130243.1033.8034.35-20.2
US Gold*UXG30529.377.417.51-20.1
Almaden Mnls*AAU51605.043.713.98-19.2
Silvercorp Mt*SVM586713.4810.5511.14-18.0
Nevsun Res*NSU44406.465.195.34-17.9
U.S. greatest value change
WEEK
VOLUMECLOSECHANGE
Intl Coal Gp*ICO32390889814.45+3.42
OM Group*OMG163021436.99+0.75
Alcoa*AA22056945617.15+0.15
SinoCoking Cl*SCOK34267466.45+0.05
Tara Gold*TRGD2498230.33+0.04
Crystallex In*KRY18185030.13+0.01
Linux Gold*LNXGF511200.05+0.01
Allied Nevada*ANV130151534.35-8.71
Alliance Rs P*ARLP88103172.99-8.48
Alpha Nat Res*ANR3288489051.21-6.96
Agnico-Eagle*AEM1586281762.65-6.93
Goldcorp*GG5584069048.92-6.91
Randgold Res*GOLD416444479.73-6.84
Massey Energy*MEE1475843061.48-6.76
Agrium*AGU346500584.19-6.24
Compass Mnls*CMP41646791.47-6.14
BHP Billi-BHP*BHP2164702195.50-5.74
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