Toronto Stock Exchange, May 20-24

The Toronto Stock Exchange’s main index stayed in the green during the shortened week despite speculation that the U.S. Federal Reserve may slow down its monetary easing.

During the trading session the S&P/TSX Composite Index moved up 54.17 points to 12,667.22, shaking off fears that the U.S. central bank would end its US$85-billion monthly bond-buying program sooner than expected.

The spot price for gold climbed US$26.10 per oz. to US$1,386.30, bumping the S&P/TSX Global Gold Index up 8.45 points to 188.65. The S&P/TSX Capped Diversified Metals and Mining Index edged up 1.91 points to 842.42.

Verde Potash soared 50% to $1.65 a share — nearly erasing the loss it suffered the previous week upon delaying the bankable feasibility study for its flagship Cerrado Verde potash project in Brazil because it didn’t receive a performance guarantee on its proposed 12,000-tonne-per-day potassium recovery plant. On May 24, the junior said Leonardo Moretzsohn, who has 30 years of experience in project finance, would join the company’s board in June.

Strathmore Minerals surged 42% to 24¢ after Energy Fuels Resources — the largest uranium producer in the U.S. — signed a letter of intent to acquire the junior mainly for its Roca Honda and Gas Hills uranium projects in New Mexico and Wyoming. Energy Fuels is offering 1.47 shares for each Strathmore share, reflecting a 31% premium. The deal is expected to close in August.

Gold miners dominated the most actively traded list. Goldcorp led the way with 39.4 million shares traded. It tacked on $1.12 to end at $27.70 on no news.

On May 24, news broke that Chilean environmental authorities slapped Barrick Gold with a record US$16-million fine for not building the promised water containment systems at its Pascua-Lama gold project that straddles the Chilean-Argentine border. Chilean authorities have ordered the miner to complete the project’s water management system in Chile before it can resume construction, which was halted in April. Despite the large fine, Barrick kept its chin up, adding 62¢ to $19.69, as 18 million shares changed hands.

Detour Gold was one of the top value winners, climbing $1.33 to $10.04. The relatively new gold producer announced a $153-million bought-deal financing with a syndicate of underwriters, led by BMO Capital Markets. The underwriters will buy 17.5 million shares at $8.75 apiece, and have an over-allotment option to purchase 2.63 million shares at the same price for another $22.9 million in proceeds. The funds from the offer will be used mainly to finance the ramp-up of the Detour Lake gold mine in northern Ontario. The mine is on track to reach 55,000 tonnes per day by year-end.

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