TSX moves sideways as commodities falter, Apr. 15-19

Despite a historic fall in the gold price and weakness in commodities, the TSX Composite Index managed to claw its way to a 4 point gain, finishing the April 15-19 period at 12,065.55 points.

With fears of a Cyprus gold reserve sell-off, the gold price went into a free-fall to start the period but managed to stabilize in the following days. The yellow metal wound up trading for US$86 less than where it ended the period before, at US$1,395.60 per oz. The selling reverberated through to already beaten up gold equities as the Global Gold Index was off 10 points, breaking below the 200 point mark for the first time since 2008 to finish at 191.84 points.

The Capped Metals & Mining Index also fell beneath the 800 point mark for the first time since 2009. The Index was off 38 points to finish at 754.29 points, as copper fell 19¢ to US$3.15 per lb. on worries that the Chinese economy would continue to show weaker growth.

While all gold producers were suffering under lower gold prices, Barrick Gold had it worse still. Shortly after learning that its flagship development project in Chile was being halted, it had a shareholder uprising on its hands. Eight large funds invested in the company are protesting an $11.9 million signing bonus to co-chairman John Thornton. The bonus would bring Thornton’s total compensation for 2012 to $17 million — a Canadian record. Barrick has its annual shareholders’ meeting in Toronto scheduled for April 24. Barrick’s stock was off $4.29 to $18.65 for the period.

Despite being a producer in Senegal since 2009, Teranga Gold has agreed to amend its stability agreement with the government to increase the royalty rate on production to 5% from 3%. In exchange, the government waived its right to take an additional 25% stake in any deposits that Teranga may develop and put through the Sabodala mill from its regional exploration permits or any ground it may acquire in the future.

On the more positive side, Allana Potash submitted its feasibility study on the Dallol project with the Ministry of Mines in Ethiopia, clearing the way for a mining license to be issued. The company said it is also in the final approval stages on its environmental assessment report, which means all permitting milestones could be cleared by later this year.

UEX had some stellar results as the company bolstered resources at the Shea Creek uranium project in the Athabasca basin. The project, which UEX has a 49% stake in, is now the largest undeveloped uranium resource in the basin. The latest study increased indicated resources by 6% as they now stand at from 2.1 million tonnes grading1.48% for 67.7 million lb. of U308, while inferred resource went up by 15% to 1.3 million tonnes grading 1.01% for 28.2 million lb. of U308. Areva Resources Canada is the project operator and has a 51% stake.