The market giveth and the market taketh away

The Big Board gave away what it gained for investors thus far this year. The TSX Composite Index was down 420 points to 12,331.85 for the April 1-5 period wiping out gains made over the last three months.

The sell-off came on the back of worse than expected job numbers south of the border, which punched holes in the notion that the American economy is coming back to full strength. Fears over rising tensions around North Korea also turned investor sentiment sour.

Concerns over the state of the global economy did little to help gold win favor as the metal was down US$23 to US$1,575.90 per oz. The falling price of the underlying metal affected those that mine it as evidenced by the Global Gold Index shedding19 points to wind up at 236.19 points.

Gold bugs won’t want to hear it but the Horizon’s Gold Bear ETF, a security that gains value when the price of gold falls, was the largest gainer in the mining sector by dollar value for the period. The ETF was up $2.04 to $15.90 for a period in which the French Bank Société Générale released a report predicting the end of the gold “bubble” with prices falling to US$1,375 per oz. by the end of the year.

The diversified miners didn’t fare any better and the Capped Metals & Mining Index was off 16 points to 850.36. The price for copper was of 6¢ to US$3.34 per lb.

Tahoe Resources brought some good news to the market as it announced it has receive the final mining license for its Escobal silver deposit in southeast Guatemala — clearing the way towards production. Construction remains on track and commercial production should come in early 2014. Escobal is expected to generate 20 million silver-equivalent oz. a year based on 27 million indicated tonnes grading 422 grams silver per tonne, 0.43 gram gold, 0.71% lead and 1.28% zinc. Cash costs are estimated to come under US$5 per oz. The company’s shares gained $1.00 for the period, finishing at $18.81 per share.

Century Iron Mines also managed to buck the glum mood of investors and scratch out a gain, even if it took management’s own money to do it. The company’s stock was up 23% to 51¢ after its CEO, CFO and a board director bought 1.5 million shares at a price of 40¢ per share. Last month the company released a preliminary economic study on two of its iron ore projects: Joyce Lake and Duncan Lake. Joyce Lake, which is situated within the Labrador Iron Trough, is a direct shipping ore project with a pre-tax net present value of $94.5 million using an 8% discount rate.

And drill results from Mawson Resources failed to capture investor imagination. The company’s stock was down 30% to 74¢ after releasing result from its winter drill program at the North Rompas, South Rompas and North Rajapalot prospects in Finland. The best intersection returned 0.5 metres grading 148 grams gold and 0.42% U3O8 from 16.5 metres depth. The company drilled 51 drill holes at Rompas-Rajapalot over the course of its winter drill campaign.