TSX hits 16-month high, Oct. 17–21

Canada’s main benchmark index rose on the back of higher commodity prices and better-than-expected corporate earnings. The S&P/TSX Composite Index gained 2.4% to close at 14,939.04 — its highest level in 16 months. The S&P/TSX Global Mining advanced 6.4% to 63.49, and the S&P/TSX Global Gold Index surged 8.8% to finish at 224.07. The spot gold price in New York climbed 1.2%, or US$15.20, to US$1,265.70 per ounce. December West Texas Intermediate crude added 1% to close at US$50.85 per barrel.

Canada’s manufacturing sales increased 0.9% in August, beating expectations. The Bank of Canada held its key interest rate at 0.5%. However, it lowered its economic growth forecasts, citing a slower housing market and declining exports. The central bank expects 1.1% growth this year and 2% next year, compared to 1.3% and 2.2% earlier.

Alderon Iron Ore climbed 68.2% to 19¢ per share, after updating its Kami iron ore project in Labrador. Alderon has retained Montreal, Que.-based BBA to complete the re-scoping process by publishing a preliminary economic assessment (PEA) of Kami. The PEA will incorporate the existing infrastructure at the idled Wabush mine to lower the project’s initial and sustaining capital costs. Given there are no reserves remaining at the Wabush mine, the pit could be used as a tailings storage and management facility for the Kami project. Alderon intends to work with relevant stakeholders to acquire access to the Wabush mine, which sits 6 km away.

Alamos Gold shares jumped 18.4% to $11.60, after it made a strategic investment in Corex Gold. Alamos paid $2.5 million for a 19.1% interest in the junior. It bought 25.3 million Corex shares for 10¢ a share. Corex’s flagship Santana gold property sits 50 km southeast of Alamos’ Mulatos gold mine in Sonora, Mexico. Alamos notes it made the purchase for investment purposes and may adjust it depending on market conditions. Corex also issued 3 million shares to management and 6.1 million shares to H. Morgan & Co. (HMC), which is Santana’s operator, at 10¢ apiece. HMC and Corex’s management now own 17.8% and 8% of Corex.

ECobalt Solutions, previously Formation Metals, was the biggest percentage loser, plunging 22.5% to 55¢ per share. The company reported that it obtained a receipt for a preliminary short form, base shelf prospectus with the Securities Commissions in each of the provinces in Canada except Quebec. Upon receiving a final receipt, eCobalt can make offerings of up to $100 million of securities during the 25 months that the shelf prospectus is effective. ECobalt intends to use the proceeds from selling securities to develop its Idaho cobalt project.

Agnico Eagle Mines topped the value gainers’ list, advancing $5.32 to $65.33 per share. It will release its third-quarter results on Oct. 26.