Canada’s benchmark index dips slightly, March 14-18

The U.S. Federal Reserve kept interest rates on hold, spot gold rose to US$1,255 per oz. (up US$4.90) and the April contract for North American benchmark crude dropped in price (down US76¢ to US$39.44 per barrel). The Canadian dollar ended at US76.7¢. The S&P/TSX Composite Index fell 0.2% to 13,497.07, S&P/TSX Capped Diversified Metals & Mining Index rose 9% to 492.80, S&P/TSX Global Mining Index advanced 1.8% to 52.43 and the S&P/TSX Global Gold Index rose 2.2% to 188.78.

Karnalyte Resources surged 244% to finish at $3.03 per share on news of a US$700-million financing package for the first phase of its potash mine at Wynyard in Saskatchewan. Gujarat State Fertilizers & Chemicals Ltd.  (GSFC) will fully fund the first phase of Karnalyte’s potash mine. The financing includes senior-secured debt, subordinated unsecured debt and an equity infusion backstopped by GSFC. The mining facility will be built in three phases. Under phase one, the facility will produce 625,000 tonnes per year of potash. (This figure rises to 750,000 tonnes per year in phase two and 2.1 million tonnes per year in phase three.) The agreement also envisions that Karnalyte’s secondary minerals, including magnesium, will be spun off as a separate entity. GSFC, one of India’s largest fertilizer and industrial chemical manufacturing companies, first invested in Karnalyte in 2013, taking an 19.98% equity stake (for $44.7 million) and signing offtake agreements.

Shares of Harte Gold jumped 143% to 26¢ on no news. The company owns 100% of the Sugar Zone property and is permitting an exploration program for the Sugar Zone deposit, 60 km east of the Hemlo gold camp. According to a preliminary economic assessment from July 2012, the project has an indicated resource of 980,900 tonnes grading 10.13 grams gold for 319,280 contained oz. gold, and an inferred resource of 580,500 tonnes grading 8.36 grams gold for 155,960 contained oz. gold. The company also holds the Stoughton–Abitibi property on the Destor–Porcupine fault zone.

Arizona Mining’s shares jumped 38% to 69¢ on no news. The company announced on March 21 that it signed a term sheet with Osisko Gold Royalties for a 1% net smelter return royalty on any lead-zinc-silver sulphide ores mined from its 80%-owned Hermosa project in Arizona for proceeds of $10 million. Osisko and some of its insiders are also investing $5.6 million for 9.9 million units in the junior. The financing follows a March 3 non-brokered private placement that raised $2.6 million. The company has a letter of intent to acquire the remaining 20% interest in the project in Arizona’s Santa Cruz County. The company’s other project on the property is its silver-manganese Central deposit, which has a December 2013 prefeasibility study.