TSX Venture on the decline, Jan. 5-9

The S&P/TSX Venture Composite Index lost ground during the trading sessions, as it dropped 2.8%, or 19.6 points, en route to a 687.21-point weekly close. On the economic front, the U.S. Federal Reserve stated it expects the drop in oil prices to be positive, as the risks will be counteracted by U.S. domestic strength, and Statistics Canada reported that Canada’s international trade deficit on merchandise widened to $644 million in November.

Meanwhile, gold futures staged an early rally, with February contracts for bullion jumping 2.7%, or US$32.40, before finishing at US$1,216.10 per oz. Crude oil futures continue to hit multi-year lows, as February contracts for West Texas Intermediate dropped 7.4%, or US$3.86, en route to a US$48.36-per-barrel close. March contracts for copper lost 2%, or US5.6¢, before closing at US$2.76 per lb.

Junior Giyani Gold led the value-lost category during the week after announcing the expiration of a letter of intent (LOI) agreement to acquire energy assets it stated would “mold [the company] in to a major player in the oil services and energy sector.” Giyani dropped 21¢ on 3.1 million shares traded before finishing the week at 15¢ per share.

In August the company reported it had outlined the general terms under which it would acquire all outstanding securities of Horizon Enerji and Sumo Coal. Horizon’s assets include a fully permitted crude oil storage and dry-bulk cargo port development project in Turkey, while Sumo is reportedly a “cash-flow generating” coal operator in South Africa.

Giyani had been negotiating to extend the agreement in late December, but announced on Jan. 2 that the LOI had expired.

Gold Reserve also had a rough week after releasing an update on a hearing at the Paris Court of Appeal pursuant to an award against the government of Venezuela outlined in a ruling by the World Bank’s International Centre for Settlement of Investment Disputes (ICSID). The company dropped 37¢ on 130,400 shares traded before closing at $3.33 per share.

The US$740-million award was granted to Gold Reserve in late December after the company filed a grievance against the Venezuelan government over the seizure of its Brisas gold project. On Jan. 8 the company reported that the Paris Court is expected to issue a judgment on the matter by the end of January, which involves Venezuela’s request to stay the execution of the award pending the outcome of its application for annulment.

In other legal news, Samco Gold similarly saw its shares drop after releasing an update on a US$244-million Argentine court award against a subsidiary of Yamana Gold. The company lost 19¢ on 107,500 shares traded before closing at 58¢ per share.