U.S. equities post strong rally, Jan. 14-18

The S&P 500 touched a five-year high on the back of stronger housing and jobs numbers. Housing starts in December rose 12.1%—the biggest advance since June 2008—while applications for unemployment benefits dropped to their lowest level since January 2008. House Republicans also looked set to agree on a short-term increase in the U.S. debt ceiling, while China posted a better-than-expected GDP growth rate of 7.9% in the fourth quarter. The Dow Jones Industrial Average climbed 1.20% to 13,649.70 while the S&P 500 Index rose 1% to 1,485.98. The Nasdaq Composite Index rose 0.30% to 3,134.70 and the Philadelphia Gold and Silver Index fell 1.24% to 161.34.

Consol Energy shares rose US$1.69 to US$31.88 after the diversified fuel producer said it plans to invest US$835-865 million in its coal, gas and water businesses in 2013 through cash flow from operations. It also said that it expects more asset sales as it continues to rebalance its portfolio. In addition, the company told shareholders that once it completes its BMX coal mine in the first quarter of 2014, it does not expect that it will invest in new major coal growth projects. Consol produced 56 million tons of coal in 2012, down from 62 million tons in 2011.

Aurizon Mines jumped US$1.21 to US$4.67 per share on news that Alamos Gold was launching a $780 million hostile bid for the company. The share and cash offer, which breaks down to $4.65 per share, represents a 40% premium to Aurizon’s Jan. 9 closing share price of $3.33 on the Toronto Stock Exchange. Currently Alamos owns about 16% of Aurizon’s issued and outstanding shares.  

News that Claude Resources had expanded its current debt facilities with its existing bank, Canadian Western Bank, and signed a separate agreement with Crown Capital Partners for a $25 million debt facility, boosted shares of the gold producer by 12.7% to US$0.61. The company said that it expects it can grow production at its Seabee gold operation in northern Saskatchewan by 10%-15% compounded annually over the next five years. Since 1991 Claude Resources has produced over 1 million ounces of gold from the Seabee project.

The conflict in Mali, where the country’s armed forces, with the help of French troops, are fighting rebels in the north, continued to put downward pressure on the shares of Randgold Resources.  The gold producer said its Loulo-Gounkoto gold mining complex and its Morila joint venture were operating normally and that its operations are in safe areas of the country, about 700 km from conflict zones. Nevertheless, the company’s shares fell US$2.91 to US$92.27.