TSX drops, Sept. 8-12

Canada’s main stock index fell during the trading week. The S&P/TSX Composite Index dropped 38 points to 15,531.58. The spot price for gold plunged US$40 to US$1,228.30, while the S&P/TSX Global Gold Index stayed relatively flat at 77.46. The S&P/TSX Capped Diversified Metals & Mining Index added 3 points to 880.98.

Energizer Resources soared by riding a publicity wave related to its flagship Molo graphite deposit in Madagascar: news that Tesla Motors would build a $6-billion lithium-iron battery factory in Nevada. The Sept. 11 press release noted Tesla’s giga-plant would need six graphite mines, which would double demand for flake-graphite for batteries. In the same release, Energizer said it would publish a bankable feasibility study on the Molo deposit. The firm advanced 40% to 25¢ on 6.6 million shares traded.

On Sept. 12, Cameco said it reached a tentative agreement with United Steelworkers Local 8914 members, effectively ending a two-week strike at its McArthur River uranium mine and Key Lake mill in northern Saskatchewan. Five hundred thirty-five  unionized workers walked off the job on Aug. 30. The union recommended that the workers vote in favour of the new agreement.

“If the union approves the agreement as expected we believe it will ultimately have a minor impact on Cameco’s bottom line. However, this news is negative for the uranium space, as a prolonged shutdown of McArthur River would have reduced some of the excess supply in the market,” Rob Chang, an analyst at Cantor Fitzgerald, writes.

He estimates that McArthur River’s shutdown resulted in a production loss of 900,000 lb. uranium on a 100% basis, of which Cameco’s share is 600,000 lb.

Cameco is preparing to return workers to the sites. Its shares  gained 49¢ to end at $21.23, on 2 million traded.

At a recent special meeting, B2Gold shareholders approved the acquisition of  Australian-based Papillon Resources, announced on June 3, 2014. Papillon shareholders are set to vote on the deal on Sept. 15. The transaction should close on Oct. 3. B2Gold shares slipped 16¢ to $2.34, on 15.9 million traded.

Yamana Gold has suspended ramp-up activities at its Santa Luz gold project in Brazil and has put the project on care and maintenance, citing lower-than-expected recovery from the carbon-in-leach circuit and declining metal prices. It intends to evaluate alternative metallurgical recovery processes before the end of 2015. Meanwhile, the company has reduced dilution and improved grade reconciliation at its Pilar project, also in Brazil, which should reach commercial production by year-end. Yamana lost 43¢ to end at $8.09, as 9 million shares changed hands.

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