Toronto Stock Exchange

The S&P/TSX Composite Index rose 231 points to 11,766.36 for the period as investors focused on possible monetary easing and a stabilizing European debt crisis. Optimism had been spurred on by the European Central Bank’s pledge to do whatever it takes to save the euro currency union, which could include market intervention to lower the borrowing rates of countries like Spain.

The news coupled well with an emerging theme that central banks in the U.S. and Europe would provide stimulus, which outweighed news of slowing second-quarter U.S. gross domestic product growth. The gold price recovered by US$37 to US$1,618 per oz. and the gain transferred over to miners, with the S&P/TSX Global Gold Index rising 13 points to 291.12.

The period saw two stalwarts of the gold industry in Canada trending in different directions as shares of Agnico-Eagle Mines climbed $4.23 to $43.39, while Barrick Gold shares fell $2.09 to $32.49. The difference in fortunes had to do with investor reaction to quarterly results.

Agnico showed that it was getting a handle on technical issues at its Meadowbank mine, and announced increased overall production from its five-mine portfolio.

Barrick, however, was hampered by cost increases and delays at Pascua-Lama, more setbacks at Lumwana, shelved Cerro Casale and Donlin Creek projects and a revised copper-gold production base. As a result, Standard & Poor’s rating agency lowered the company’s credit rating to BBB+ from A-.

The S&P/TSX Capped Diversified Metals & Mining Index was also up, climbing 24 points to finish at 831.99, despite the copper price falling 1¢ to US$3.43 per lb.

Teck Resources failed to partake in the uptick, however. The company’s shares fell $1.54 to $28.66 after it said the global economic downturn was hitting its bottom line. Second-quarter results from the miner were lower than expected owing to weak coal and copper prices as the Chinese growth story lost steam. Teck said second-quarter profits dropped 65% to $268 million, or 46¢ per share, down from $756 million, or $1.28 per share, while revenues for the quarter fell to $2.6 billion compared with $2.8 billion a year ago. The fall comes despite record copper production of 90,000 tonnes for the quarter.

Dalradian Resources saw its share price climb 36% to 90¢ after releasing its preliminary economic assessment for an underground mine at its Curraghinalt gold deposit in Northern Ireland. The study estimated that a mine could generate an internal rate of return (IRR) of 51.7% over a 15-year mine life. The average head grade is expected to be 8.1 grams per tonne gold, and the mill could process 1,700 tonnes per day for 145,000 oz. gold production per year.

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