TSX falls as fears over Greece resurface

Fears over whether Greece would be able to meet austerity requirements set by the European Union meant the risk-free trade was back on. That led investors to pile into U.S.treasuries sending both the Canadian dollar and the TSX Composite Index lower. The EU set strict measures which Greece must meet if it is to receive its latest bailouts, and as investors fretted over the consequences of a possible default the Composite Index was down 158 points to 12,389.42 points for the Feb. 6-10 period.

With treasuries being the preferred safe haven the price of gold fell US$6 to US$1,725.30, and it took gold miners along for the ride. The Global Gold Index fell 9 points to finish up at the 374.15 point level.

As investors left the global growth story, diversified miners fell too and the Capped Metals & Mining Index was down 58 points to 1,171.60 as nickel, lead and zinc prices were lower, while copper, aluminum, and tin prices were slightly higher.

Nevsun Resources had to tell the market that it has a lot less gold in one of its deposits than it originally believed. The company said that due to reduced reserves at its Bisha gold mine inEritrea production at the mine is set to fall as much as 50% this year. That news rattled investors as the company’s share price was down 17% to $4.00. The trouble comes from the Main zone at Bisha, where Nevsun overstated reserves by mistaking waste rock for gold-bearing ore.

Horizonte Minerals had better news for investors as it announced it had closed a deal to acquire the Vila Oito and Floresta nickel laterite projects inBrazil. The projects were purchased from Lara Exploration for 8.5 million new shares worth roughly $2 million. The company’s shares were the largest gainers by percentage points for the period as they were up 63% to 26¢.

It was a big week for Yukon-Nevada as well. The company announced it was restarting production at itsJerrittCanyon gold mine, which was shutdown in early January so that the company could complete a winterization and refurbishment program. Just a few days after the announcement the company said it had secured $20 million to further expand the mine. The money comes from a gold hedge with Deutsche Vank on 27,950 ounces of gold or roughly 4% of its current gold reserves. The company’s shares were up 30% to 39¢ for the period.

 And Rio Novo saw its share price fall by 21% to 70¢ after updating its exploration program at the Toldafria Project. While it says its channel sample results outline both high grade sheeted vein zones and stockworks, the market didn’t rally despite a highlight assay of 32 metres grading 15.77 grams gold. Toldafria sits in the gold-rich in the Mid-Cauca belt ofCentral Colombia. The company also announced it had raised $20 million in a bought deal for 26.7 million units at 75¢ per unit.