TSX gains, Aug. 29 – Sept. 2

The S&P/TSX Composite Index rose 1.06% to 14,795.70, despite mixed economic news. The S&P/TSX Global Mining Index edged up 0.35% to 63.20 and the S&P/TSX Global Gold Index added 1.45% to close at 243.59. Spot gold moved up 0.3% to US$1,324.80 per oz., while U.S. crude oil futures fell 5.4% to US$44.44 per barrel. Canada’s gross domestic product (GDP) shrank at an annual rate of 1.6% in the second quarter, largely due to Alberta’s wildfires, compared to a growth of 2.5% in the first quarter. Results in June, however, indicated the economy is recovering, with the GDP growing 0.6% over May.

Fertilizer majors Agrium and Potash Corp. of Saskatchewan topped the value-added list, after PotashCorp confirmed on Aug. 30 that the two were in a potential merger talk. BMO analyst Joel Jackson notes key questions are emerging from the possible marriage, including “political rhetoric between Saskatchewan and Alberta on a POT/AGU head office in Calgary or Saskatoon and how this could impact regulatory” as well as what the deal would mean for Canpotex, the Canadian potash exporting and marketing firm. While synergies could have fuelled merger talks, Raymond James analyst Steve Hansen comments Agrium’s motivations are unclear, as the deal does not fit its “retail-centric growth strategy.” Agrium shares jumped $11.85 to $127.63, while PotashCorp shares added $2.50 to finish at $23.36.

Dalradian Resources rose 12.8% to $1.50 per share on a positive internal grade reconciliation study at its Curraghinalt gold deposit in Northern Ireland. The study shows a 12% increase in grade to 21.42 grams gold per tonne, and a 16% increase in contained gold ounces within a portion of the V-75 vein, where Dalradian is currently test stoping. The company notes a feasibility study and submission of a mine construction permit are on track for the second half of 2016. Review and approval of the permit application can take one to two years.

Eastmain Resources climbed 12.2% to 83¢ per share, after reporting encouraging results from a recently completed prospecting program on its jointly held Eleonore South property in Quebec’s James Bay gold district. The program has returned some of the best prospecting gold grades to date in the Eleonore mining camp, which range up to 102.5 and 142 grams gold per tonne. Out of the 114 samples in the program, 30 samples reported grades above 1-gram gold. Eastmain notes the first phase of a 5,000-metre drilling program will start in mid-September to test high-priority targets on the property. Eastmain holds 36.72% of Eleonore South; Les Mines Opinaca Ltée (a subsidiary of Goldcorp) owns 36.71%; and Azimut Exploration has 26.57%.

Argex Titanium was the biggest percentage loser, dropping 21.4% to 6¢. On Aug. 29, the company said that the Toronto Stock Exchange gave it a 30-day extension to Sept. 26 to meet the TSX’s listing requirements. The junior is working on completing the development of its titanium dioxide pigment technology and negotiating settlements with its creditors.