Toronto Stock Exchange

The S&P/TSX Composite Index jumped 199 points, or 1.7% during the trading week, to close at 12,089.89. The boost came in part from positive economic data and Germany’s commitment to save the euro currency union. The S&P/TSX Global Gold Index edged up 2 points to 300.11, while the spot price of gold fell US$4.70 per oz. to US$1,615.80. The S&P/TSX Capped Diversified Metals & Mining Index slipped 8 points to 865.62.

Vancouver-based Great Basin Gold was the week’s biggest percentage loser and most active stock. It said it’s facing a “liquidity challenge” due to operational problems that shrunk second-quarter revenue. Its chief gold assets — the Burnstone mine in South Africa and the Hollister project in Nevada — suffered during the period with infrastructure and technical problems. The company cites delays in ore development and water management problems at Burnstone, and difficulties accessing higher-grade stopes at Hollister. For the period ended June 30, Great Basin posted $32.4 million in revenue, down from $56.7 million a year ago. Net losses climbed to almost $22 million compared to $1 million a year ago. 

To deal with the financial problems, the company formed a special committee to consider alternatives to steer the company. It also initiated an aggressive cost-reduction program and is working with its lenders to restructure its current term loans. Despite the challenges, the company said the projects won’t need to undergo an impairment charge at this time. Great Basin’s chief financial officer Lou Van Vuuren has been named interim CEO, replacing former president and CEO Ferdi Dippenaar. The junior lost 56% to end the week at 23¢, on 26.6 million shares traded.

Barrick Gold saw heavy trading during the week, as the world’s largest gold miner said it is looking to unload its gold assets in Tanzania and confirmed it had been in talks with China National Gold regarding its 74% stake in African Barrick Gold. Analysts say a sale would reduce the Barrick Gold’s average cash cost while slightly shrinking its production base. Barrick also reported initial production at its 60%-held Pueblo Viejo gold mine in the Dominican Republic, with commercial production expected later this year. Barrick expects the mine to produce 100,000 to 125,000 attributable oz. gold for 2012 at low cash costs. Goldcorp holds the remaining 40%. Barrick rose $1.30 to $35.60, on 12.2 million shares traded.

Royal Gold was the week’s top value gainer, adding $2.64 per share to close at $77.35. The Denver-based company boosted its gold stream in Thompson Creek Metals’ Mt. Milligan copper-gold project to 52.25%, by closing the acquisition of another 12.25% on Aug. 13. Thompson Creek estimates that the proposed mine in B.C. will start commercial production late next year.

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