Market news: TSX Venture Exchange

The S&P/TSX Venture Composite Index took a breather this week after posting two consecutive periods of gains to start 2013, dropping 4.93 points, or 0.4%, en route to a 1,235.32-point close on Jan. 18.

Markets rallied later in the week following further signs that China was moving towards economic recovery, with the world’s second-largest economy posting a 7.9% growth during the fourth quarter of 2012. Though the growth figures were an improvement from the 7.4% seen during the second quarter, China posted its weakest annual growth rate since 1998 at 7.8%.

Commodity prices were a mixed bag this week with February contracts for gold bullion dropping US$3.80 to US$1,687 per oz., while February crude contracts jumped 7¢ to US$95.56 per barrel on the New York Mercantile Exchange. Copper rallied on the back of the Chinese economic figures, with March contracts rising 2¢ to close the week at US$3.68 per lb.

Kelowna-based Fission Energy had a busy week after announcing it had agreed to a US$70-million acquisition by Denison Mines. Fission saw 2 million shares trade hands this week, as the company’s stock jumped 21¢ before closing at 76¢ on Jan 18. Denison has been targeting a larger presence in Saskatchewan’s prolific Athabasca basin, and Fission’s 60% interest in its 402-sq.-km Waterbury Lake uranium project seems to fit the bill, with 13 million indicated and inferred lb. uranium resources. As part of the transaction, Fission shareholders will receive 0.355 of a Denison share and one share of a new spin-out company for each share held. The offer represents a 49% premium to Fission’s Jan. 15 close and a 42% premium to the 20-day, volume-weighted average price. If the deal is closed, Fission shareholders would own 11% of the Toronto-based firm. 

Vancouver-based Great Quest Metals found out how socio-political events can trigger a share-price rally, after news of French troops stepping up their presence in the troubled African nation of Mali saw the company’s shares jump 28¢, en route to a 97¢ weekly close. CEO Joel Jeangrand states that the developments “signal a turn in the geopolitical crisis that has affected the country for the past ten months.” In mid-December Great Quest released a preliminary economic assessment on its 1,206 sq. km Tilemsi phosphate project — located in Mali — that demonstrated a US$649-million net present value and a 34% internal rate of return at a 10% discount rate. The US$143-million project would produce 1.18 million tonnes of fertilizer products annually over a 20-year mine life.

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