TSX dips despite positive jobs data

Toronto’s resource-heavy index fell during the Nov. 30–Dec. 7 trading week as strong job creation in both Canada and the United States did little to quash concerns of the fast-approaching fiscal cliff.

The S&P/TSX Composite Index lost less than a percent or 80 points to close at 12,159.59.

On Dec. 7, Statistics Canada reported 59,300 jobs were created in November, with the majority being full-time positions and in the private sector. The jobless rate last month fell to 7.2% from 7.4%.

South of the border, some 146,000 positions were added, as the jobless rate declined to a four-year low of 7.7%, from 7.9%.  

However, StatCan noted labour productivity for Canadian businesses tumbled 0.5% in the third-quarter, whereas U.S. efficiency rose 0.6% over the same period.

The S&P/TSX Global Gold Index gave back 13 points to close at 297.04, as the spot price of gold sank US$11 per oz. to US$1,704.50. Meanwhile, diversified miners crept lower as the S&P/TSX Capped Diversified Metals and Mining Index lost nearly 2 points to 942.87.

Rockwell Diamonds, one of the top percentage gainers, added 30% to reach 30¢, after announcing the pilot bulk x-ray project at its Saxendrift diamond mine in South Africa has recouped its initial costs. The project, which entails processing old recovery tailings, was initiated last November and commissioned five months later, with capital expenditures coming in 7% below its initial $1.5-million budget. During the six months ended Oct. 31, 2012, the project recovered 1,596 carats, including three 52, 72 and 145-carat stones. Rockwell reported revenue of US$4.2 million from the diamond sales.

The company said the bulk x-ray technology improves the extraction of diamonds and lowers operating costs. It also plans to apply the technology to its new Saxendrift Hill complex mine, where production should start in early 2013.  

Coro Mining slipped after releasing a compliant resource estimate for the Berta Sur deposit in Chile that pegged measured and indicated resources at 4.4 million tonnes grading 0.52% copper, using a 0.3% total copper grade cut-off. At a US$3 per lb. copper price, the pit is estimated to contain 6.1 million tonnes grading 0.40% total copper, and a low strip ratio of 0.04-to-1. A feasibility study should be completed in mid-to late 2013. Coro closed down 22% at 21¢.

Potash Corp. of Saskatchewan was one of the biggest value gainers, advancing 61¢ to $39.04. In its recent market analysis report for the fourth quarter of 2012, the large fertilizer miner estimates a brighter year ahead. It predicts global potash consumption to reach record levels in 2013, partly due to agronomic need. The company said it believes inventories in many key markets are below year-end 2011 levels and predicts demand to increase in uncertain markets such as India.

BMO Capital Markets analysts note that China and India are stepping closer to settling new seaborne potash contracts, with the possibility of both concluding deals by January.