Toronto Stock Exchange, May 6-10

The equity bull run was back on for the period, as the S&P/TSX Composite Index rose 109 points to 12,589.09.

While the gold price fell US$34 to US$1,436.00 per oz., other commodities — such as base metals and oil — showed strength, which fed into a rising Canadian dollar. The loonie was up US0.11¢ at US99.67¢.

Higher commodity prices hinted at momentum within the U.S. economy, which lifted diversified miners, with the S&P/TSX Capped Diversified Metals & Mining Index up 51 points to 873.21, and the price for copper up 5¢ to US$3.35 per lb. 

Despite gold’s poor performance, the S&P/TSX Global Gold Index gained a point to 200.38 points.

Kinross Gold was on the road to recovery  after a long tumble down. The company’s stock was the most actively traded, gaining 15¢ to finish at $5.54. The activity came after Kinross released its third-straight quarter of solid financial results, as year-over-year profits grew by 50%. Net income got a boost from rising production and falling cash costs. Kinross produced 649,000 equivalent oz. gold at all-in cash costs of US$1,038 per oz. The company credits its success to  renewed cost discipline at its mines.

Uranerz Energy also enjoyed a solid period, as its shares were up 36% to $1.36. The run came after the company announced that its Nichols Ranch in-situ uranium project in Wyoming is nearing completion, and should go into production later this year.  The company says the drilling pads for two deep disposal wells are complete, and drilling is ready to start. The Nichols Ranch is licensed to recover up to 2 million lb. uranium oxide per year, with initial annual recovery targeted for 600,000 to 800,000 lb.

Shares of Belo Sun Mining didn’t fare as well, with the market reacting poorly to a prefeasibility study released on its Volta Grande gold project in Brazil’s Para State. While the study met expectations on the capex side, a lower than expected resource-to-reserve conversion disappointed. The study says it would cost US$749 million to build a 19,500-tonne-per-day open-pit operation producing 313,100 oz. gold a year, over a mine life of at least 10 years. Volta Grande has 2.8 million oz. gold in reserves from 59.2 million tonnes grading 1.48 grams gold, using a gold price of US$910 per oz.

Centamin shares also took a tumble after the company updated its Sukari gold mine in the Eastern Desert of Egypt. The future of the mine, which started production in 2009, has been uncertain since the country’s new administration began questioning the legitimacy of the miner’s contract. Centamin is appealing the annulment of its mine lease, saying the State Commissioner released negative — though non-binding — recommendations for the Supreme Administrative Court ahead of its hearing on June 19. The company chose not to publish the report.

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