Market News

TORONTO STOCK EXCHANGE

The S&P/TSX Composite Index fell 223 points to 11,596.56 for the period, with investors skeptical that the latest European Union summit would agree upon concrete measures to tackle the region’s debt crisis.

Doubt in Europe didn’t hurt gold, however, as the yellow metal rose US$25 to US$1,597.70 per oz. — although gold miners didn’t participate in the metal’s gain. The S&P/TSX Global Gold Index finished the period where it began, at the 304-point mark. 

The diversified miners fared somewhat better, with the S&P/TSX Capped Diversified Metals & Mining Index up 17 points to 868.71. The index tracked the price of copper and the red metal was up 16¢, to finish the period at US$3.47 per lb.

And while gold companies in general did not fare well, the period’s biggest percentage gainer was Australia-based Allied Gold Mining, which saw its shares rise 69% to $2.45 after a generous offer from fellow Aussie gold miner St. Barbara, which wants to merge the two mid-tiers into a company worth over $1 billion. The company is willing to pay Allied Gold shareholders $1.067 in cash and 0.8 of a St. Barbara share for each share in Allied Gold. The offer values Allied Gold at $578 million, or $2.83 per share, for a 90% premium to its closing price the day before the deal was announced.

Western Potash shareholders weren’t feeling quite so flush. The company’s shares plunged 25% to 80¢ on heavy volume after talks ended with a potential Chinese investor. The breakdown in negotiations had investors fretting over whether the company could get its Milestone potash project into production in Saskatchewan. Western insists there is another suitor and that the two parties are well into negotiations.

Investor sentiment also turned sour towards Tahoe Resources, only this time political risk was the culprit. The company saw its share price fall by 21% to $14.07 despite assurances that mining law reforms in Guatemala wouldn’t affect its Escobal silver project in the country. The Guatemalan government wants to allow state ownership in mining projects, which triggered nationalization fears among investors. Tahoe, however, says its conversations with high-level officials lead it to believe there is no intention of acquiring an interest in the Escobal project.

Returning to the positive, Redhawk Resources shares gained 22% to finish at 53¢. The move comes months after the company updated its resource estimate for its Copper Creek project near Tucson, Ariz. The estimate increased measured and indicated resources to 502 million tonnes grading 0.49% copper equivalent for 4.45 billion lb. copper, and inferred resources increased to 481 million tonnes grading 0.38% copper equivalent for 3.3 billion lb. copper.

TSX most active issues

TSX greatest percentage change

TSX greatest value change