Toronto Stock Exchange

The S&P/TSX Composite Index was up 127 points to 11,841.98 during the holiday-shortened period after beginning the period on a tear as it caught up to U.S. markets.

The run was based on the notion that central banks were prepared to do almost anything to help stimulate growth. By mid-week, however, that enthusiasm cooled as doubts arose over the European Central Bank’s bond buying. Investors feared the move might come too late and be ineffective. Investors appear convinced that poor Chinese economic data will push that country’s central bank to step in and stimulate.

In Canada the unemployment rate rose a tenth of a point to 7.3% in July as the economy shed 30,400 jobs — worse than the 6,000 jobs analysts expected would be added.

The S&P/TSX Global Gold Index was up 5 points to 298 as the price for gold was US$8 higher to US$1,622.80 per oz., while the S&P/TSX Capped Diversified Metals & Mining Index was up 31 points to 874.1, as the price for copper moved a penny higher to US$3.39 per lb.

One of the more interesting deals of the period was a streaming agreement between Silver Wheaton and Hudbay Minerals. Hudbay, which is looking to finance its $1.5-billion Constancia copper mine in Peru, sold some future silver and gold production from Constancia and its 777 mine in Manitoba to Silver Wheaton for US$750 million. This amount buys Silver Wheaton all of the silver and gold production from the 777 mine until the end of 2016 and the start of commercial production at Constancia. Once Constancia starts up, Silver Wheaton will receive all of the silver production and 50% of the gold production from 777, and 100% of the metal from Constancia. Silver Wheaton shares rose $2.71 to $30.33 for the period.

In a more conventional deal, Endeavour Mining is looking to buy Avion Gold for  stock worth $389 million. If completed, the deal would consolidate Endeavour’s position in West Africa and grow its expected gold production by 50% this year. Endeavour is offering a 56% premium to Avion’s share price. News of the proposed takeover lifted Avion shares by 30% to 69¢.

Drill results helped brighten Elemental Minerals’ fortunes as the company gained 44% to finish the period at 85¢. The results were from its Kola deposit in the Republic of the Congo, and they represented the highest grade of potash yet found by Elemental, at 37.80% K2O over 3 metres and 34.20% K2O over 4 metres.

Semafo’s shares rose 23% to $3.75 after the company said it would deal with production problems by bringing in a new CEO. Semafo founder Benoit La Salle will make way for the company’s COO Benoit Desormeaux, after the company reported a net loss of $17.5 million for the second quarter, compared a profit of $30.6 million a year earlier. Gold production for the quarter fell 5% to 60,500 oz.

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