TSX falls on higher oil, gold prices, March 23-27

Canadian stocks fell for a third straight week, following bleak U.S. economic data and rising tensions in the Middle East. Oil and gold prices spiked after Saudi Arabia and its allies launched airstrikes against Houthi rebels in Yemen, who are fighting to overthrow the country’s president, Abd- Rabbu Mansour Hadi.

The S&P/TSX Composite Index slipped 145 points, or 0.9%, to finish at 14,812.42. The S&P/TSX Capped Diversified Metals & Mining Index tumbled 5.3% to 676.39, and the S&P/TSX Global Gold Index dropped 4.4% to 64.25. The gold spot price, however, gained 1.3% to finish at US$1,198.40 per oz. Brent oil for May delivery rose 1.9% to US$56.41 a barrel. The U.S. dollar index, which measures the greenback against a basket of six major currencies, dropped 0.7% to 97.52, after data indicated slower-than-expected fourth-quarter growth in the U.S.

Fortune Minerals was the week’s percentage winner, soaring 47% to 13¢ after it closed another US$4 million financing with Lascaux Resource Capital Fund LP for working capital at its flagship Revenue Silver polymetallic mine in southwest Colorado. Lascaux gave Fortune US$35 million last October to finance the acquisition of the mine under a metal prepay facility, plus US$12 million in December 2014 and February 2015 for working capital. Fortune is ramping up Revenue Silver to 400 tons (363 tonnes) per day.

Calgary-based TVI Pacific rose 33% to 2¢ on 2014 financial results, where it ended the year with $5.3 million in cash and short-term investments, a $6-million working capital surplus and no debt. The company operated the Canatuan gold-silver-copper-zinc mine in the Philippines from 2004 to 2013. Milling operations at Canatuan stopped in January 2014 after TVI processed the asset’s remaining stockpile. The junior is now assessing the Cirianiu gold project in Fiji, while pursuing other opportunities in the Asia-Pacific region.

Allana Potash was the most traded stock after Israel Chemicals offered to buy 84% of the junior that it does not own for $137 million. Under the deal, Israel Chemicals is offering Allana shareholders 50¢ in cash, except for Liberty Metals & Mining Holdings, which will receive 50¢ in Israel Chemicals shares for each Allana share held. The offer, approved by Allana’s management, represents a 51.5% premium to the company’s March 26 closing price of 33¢. The acquisition will allow Israel Chemicals to speed up the development of Allana’s Danakil potash project in Ethiopia, expected to cost US$642 million to build. Given the project’s hefty price tag and difficulties of raising capital, Allana’s CEO Farhad Abasov said the transaction is the “best liquidity opportunity” for shareholders. The deal is set to close by Aug. 17, pending shareholder and regulatory approvals. Allana ended the week up 32% at 48¢, on 21 million shares traded.