Gold, silver producers lift TSX over Sept 13-17

Despite the price of gold setting new highs all week, the S&P-TSV Composite Index was unsettled over Sept. 13-17, chasing gains with losses to end the week up just 7.59 points at 12,164.56. Heavy trading on the last day of the week lifted the daily average to 244 million trades.

The overall market may have wavered but the bulls-versus-bears race painted a much more positive picture: 64 companies reached new 52-week share price highs while only six fell to new lows.

The price of gold may have stolen the spotlight over the third week of September but the price of silver also performed handsomely. Spot silver climbed almost US$1 over the week, closing at US$20.77 per oz., bringing the metal essentially back to its 2008 high of US$20.80 per oz.

Silver producers reaped the rewards of silver’s ascent. At least eight Toronto-listed silver producers hit new 52-week share price highs, from nascent producer Alexco Resource to established producers like First Majestic Silver, Mag Silver, and Pan American Silver. Silver Wheaton, the main streaming company on the silver side, also hit a new high, climbing to $25.75.

Silver explorers also felt a push from the rising price of their target metal. The biggest story there was Golden Minerals, which is exploring the feasibility-stage El Quevar silver project in Argentina. Promising intercepts at the eastern and western ends of the current Yaxtch resource, such as 146 metres grading 317 grams silver per tonne and 2 metres of 970 grams gold, prompted the company to postpone completion of a feasibility study until more drilling can be completed. Golden Minerals gained $4.38 or 51% over the week to reach $13.34.

And gold producers responded to their metal’s increasing value. Gold closed at a new high three times during the week, including a Friday close of US$1,274.70 per oz. Centerra Gold and OceanaGold both rose new 52-week highs, as did Great Basin Gold.

Investors approved of Augusta Resource‘s move to sell 20% of its flagship Rosemont copper-molybdenum project in Arizona to a Korean consortium. The Korean group will contribute US$176 million to project financing, in exchange for the ownership stake and a market terms offtake agreement covering 30% of Rosemont’s copper concentrate and 20% of its copper cathode and moly concentrates. Augusta’s share price rose to a new high of $3.42 mid-week before settling to $3.30.

Gabriel Resources got a healthy lift on news the Romanian government re-started the environmental permitting process for Gabriel’s 80.5%-owned Rosia Montana project, home to reserves hosting 10 million oz. gold and 47 million oz. silver. A previous government suspended the process, which is complicated as the deposit has been mined for over 2,000 years and the area is now plagued with heavy metal acid rock drainage issues. Gabriel added 97¢ or 20% to reach $5.89. Neighbouring Romanian explorer Carpathian Gold also gained on the news, climbing to 52¢ from 45¢.