Market news (April 25, 2011)

Toronto Stock Exchange

Markets continued in their unsettled behaviour as the TSX composite index fell a significant 565 points to 13,622.66 for the April 11-15 period. 

The volatility in the markets can largely be attributed to geopolitical unrest and debt issues in Europe and the U.S. The Bank of Canada maintained its overnight rate at 1% this week and upgraded its outlook for both economic growth and inflation – despite rising fuel and food prices. 

The bank did, however, warn that a higher loonie could lower import prices and hurt the country’s exports.

Jittery markets were good news for gold, as the flight to safety brought prices for the yellow metal up US$7 per oz. for the period. The metal was trending even higher at presstime as it reached an all-time high of US$1,496 per oz. Higher prices hadn’t yet trickled down to miners, however, as the Global Gold index fell 10 points to 405.64. 

The base metals complex didn’t fare so well. With worries over economic growth holding sway, the Capped Metals & Mining index was down 117 points to 1,418.97 as the prices for copper, aluminum, nickel, tin, zinc and lead all fell. 

Despite a gloomy period for base metals there were still some positive stories for miners. 

One of the biggest was Lithium Americas, having its shares jump 18% to $2.01 before releasing its preliminary economic assessment study on the Cauchari lithium brine project in Argentina. The study released on April 18 outlined a 40,000-tonne-per-year lithium carbonate production facility built in two phases, with construction of the first 20,000-tonne-per-year phase expected to begin in 2012, and the second phase expected to start in 2016. Using an 8% discount, the study put the project’s net present value at US$983 million. 

Word that Gran Colombia Gold and Medoro Resources would merge to create a Colombian-focused production and exploration company wasn’t met favourably by the market. Gran Colombia shares were off 23% to finish at $1.38, while Medoro shares fell 8% to $1.90. The companies say the newly formed company would benefit from the current production and expansion potential at the Gran Colombia gold mine, complementing the large-scale potential of Medoro’s Marmato gold project. Both are located on the mid-Cauca gold belt near Medellin.

Unrest in Burkina Faso drove Semafo‘s shares down 19% to $7.47, despite the company saying that there had been no effect on the operation of its Mana gold mine in the country. Burkina Faso has been unsettled by a mutiny in some branches of the army and by violent student protests. The soldiers are concerned about unpaid wages, and the situation forced President Blaise Compaore to dissolve his government and name a new army chief. 

TSX most active issues

VOLUMEWEEK

(000s)HIGHLOWCLOSECHANGE

Equinox MinlsEQN495007.807.467.50-0.17

Kinross GoldK4382315.8914.8815.04-0.86

Osisko MngOSK2860513.5812.3013.22-0.12

Lundin MngLUN219258.097.907.95-0.02

Uranium OneUUU203044.033.683.89-0.10

Eastern PlatinELR168151.451.301.30-0.09

Gran ColombiaGCM163881.821.121.38-0.42

SemafoSMF156849.347.187.47-1.79

Teck BTCKB1554155.7349.7849.83-5.08

South Am SilvrSAC152093.351.972.39-0.76

TSX greatest percentage change

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(000s)HIGHLOWCLOSECHANGE

Nautilus MinlsNUS30853.512.393.42+29.0

Mawson ResMAW13502.752.102.53+23.4

Diamond FieldsDFI5540.460.380.44+22.2

Liberty MinesLBE8080.120.120.12+20.0

Lithium AmericLAC9902.171.702.01+18.2

Peregrine MtlsPGM8561.250.981.18+18.0

Crystallex IntKRY10170.140.120.14+16.6

Mandalay ResMND23530.740.530.71+16.3

Richmont MinesRIC8018.116.867.94+11.0

New Dawn MngND1431.241.031.13+10.7

BRC DiamondCrBCD2400.110.090.09-25.0

South Am SilvrSAC152093.351.972.39-24.1

Gran ColombiaGCM163881.821.121.38-23.3

Ram PowerRPG52421.050.780.80-21.5

Paramount GoldPZG11903.903.033.09-19.9

SemafoSMF156849.347.187.47-19.3

Vena ResVEM29160.320.230.27-18.1

Excellon ResEXN14301.010.850.85-16.6

Red Cresc ResRCB4260.450.310.35-16.6

Solitario ResSLR2773.402.502.86-15.8

TSX greatest value change

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Central Gold-TGTU_U4246153.43+0.88

Richmont MinesRIC8014257.94+0.79

Nautilus MinlsNUS30850693.42+0.77

Sprott Ph SilvPHSU50360719.58+0.71

Sabina SilverSBB29244567.42+0.65

Queenston MngQMI12439237.60+0.56

Mawson ResMAW13503442.53+0.48

Major DrillingMDI85505816.55+0.40

Horizns G BearHGD34558979.21+0.39

CIC EnergyELC3151604.02+0.36

First QuantumFM2581746119.01-17.09

Inmet MiningIMN118627966.62-5.52

Coeur d AleneCDM81360030.05-5.09

Teck BTCKB1554102549.83-5.08

Pan Am SilverPAA380576836.56-4.27

Labdr I-Ore RoLIF_U25581476.51-4.12

Silver WheatonSLW1415870740.90-4.02

AgriumAGU268466385.12-3.14

IAMGold CorpIMG950683519.27-2.88

Tahoe ResTHO103941321.66-2.64

TSX Venture Exchange

The April 11-15 period was a rough one for the S&P-TSX Venture composite index as it dropped 97.88 points to end at 2,290.91. Activity edged up, averaging 174 million shares traded daily. The bulls and bears were in balance again, after a surge in the bulls last period, with 65 juniors reaching new 52-week highs and 63 hitting new lows.  

Creston Moly was by far the most traded stock with a remarkable 95.2 million shares traded after Mercator Minerals offered to buy it for $195 million. Mercator is offering 0.15 of a share plus 8¢ cash for each Creston share, a 40% premium. The deal would combine Mercator’s producing Mineral Park molybdenum-copper mine in Arizona and El Pilar copper mine in Mexico with Creston’s advanced El Creston moly-copper project, also in Mexico. Creston’s share price was up 14¢ to 56¢, while Mercator’s share price dropped 13¢ to $3.39 on the TSX main board.

Rare earth stocks continue to rise, with Quest Rare Minerals, Rare Element Resources and Tasman Metals topping the value gains. Quest was up $1.43 to $7.95 after releasing a revised resource estimate for the B-Zone deposit at its Strange Lake project in Quebec. The new resource puts 36.4 million indicated tonnes in the ground grading 1.16% total rare earth oxides, plus 14.4 million inferred tonnes of 1.11% TREO. Tasman was up 91¢ to $5.52 after announcing it had started drilling at its Otanmaki rare earth project in Finland. Rare Element had no news out in the period but still climbed $1.26 to $14.97.

Also rising on no news, Pro-Or Mining Resources climbed 28¢ or 186.7% to 43¢.  Company management stated there was no material change that would account for the increase. Pro-Or, which has roughly 44 million shares outstanding, saw 9.5 million shares traded in the period. On April 1, the company announced it had hired a new engineer to lead operations at its St-Augustin pilot plant in Quebec, where it is trying to use its patented extraction process to recover platinum group metals from salvaged catalytic converters.

Prodigy Gold continued upwards on new drill results from its Magino gold mine in Ontario. Hole 6 hit 143 metres of 1.54 grams gold per tonne from 123 metres depth and hole 4 cut 261 metres of 1.32 grams gold from 134 metres. The company recently released a positive economic assessment on Magino that established a net present value of $351 million and an internal rate of return of 49%. The company climbed 3¢ to 69¢, having traded at 30&c
ent; in mid-March.

NSGold gained 18¢ to 72¢ after announcing it had signed a definitive agreement for the historic Dios Padre silver mine and surrounding property in Mexico’s Sonora state. NSGold sees the potential to expand the resource by following the plunge potential of the breccia body and exploring other altered and mineralized areas on the concessions.

TSX-V most active issues

VOLUMEWEEK

(000s)HIGHLOWCLOSECHANGE

Creston MolyCMS952250.600.430.56+0.14

Aurcana CorpAUN290550.830.680.82+0.03

Orbite Expl AORTA222245.694.274.80+0.37

Apogee MinlsAPE119630.430.260.29-0.08

Copper Fox MtlCUU114052.742.222.43-0.26

Bravo GoldBVG96210.170.140.16+0.01

Pro-Or Mng ResPOI95320.540.160.43+0.28

Everett MinlsEAR91390.080.050.050.00

Robex ResRBX82590.250.190.22+0.02

Newcastle MnlsNCM81460.100.060.09+0.02

TSX-V greatest percentage change

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(000s)HIGHLOWCLOSECHANGE

Pro-Or Mng ResPOI95320.540.160.43+186.6

Whetstone MnlsWMI17600.150.120.14+75.0

Britannica ResBRR27660.080.040.07+75.0

Trillium NorthTNM490.050.050.05+66.6

Golconda ResGA29720.100.040.08+60.0

Ring of Fire RROF20230.160.100.15+50.0

Novadx VentNDX25010.630.400.60+42.8

Champion BearCBA1780.340.250.34+41.6

Source ExplSOP17740.610.420.58+38.1

Solid Gold ResSLD2190.160.120.15+36.3

BE ResBER20780.250.160.17-34.6

OroAndes ResOAR210.150.120.12-29.4

Eagle PlainsEPL26780.380.270.27-28.9

GoldmincoGCP1270.050.050.05-28.5

Dorato ResDRI22150.570.390.41-28.0

Sienna GoldSGP32640.540.270.41-28.0

Strait GoldSRD3280.120.080.08-27.2

RoxgoldROG76100.970.620.62-27.0

Goldrush ResGOD13410.250.170.17-26.0

Menika MiningMML140.040.030.03-25.0

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Quest Rare MnlQRM39328127.95+1.43

Rare Elemnt RsRES192983514.97+1.26

Tasman MetalsTSM22137725.52+0.91

Amazon MngAMZ51055710.35+0.60

Maudore MinlsMAO4550146.85+0.45

Atacama Pac GdATM7956055.50+0.40

Orbite Expl AORTA222238364.80+0.37

Golden Reign RGRR10893331.20+0.30

Loncor ResLN1221303.25+0.29

Pro-Or Mng ResPOI95315130.43+0.28

Bear Creek MngBCM21235829.04-1.63

Rainy River RsRR24101119.27-1.01

Gold CanyonGCU33967133.25-0.75

Richfield VentRVC7833789.32-0.70

Canaco ResCAN10956554.32-0.62

Mirasol ResMRZ4282185.95-0.58

Atac ResATC4667256.93-0.51

Batero GoldBAT5585094.65-0.45

Hana MngHMG21672673.39-0.42

Rio Alto MngRIO80676351.86-0.36

U.S. markets

U.S. markets took a turn for the worse during the April 11-15 trading week, with the Dow Jones industrial average falling 38.22 points or 0.31% to 12,341.83 and the S&P 500 index slipping 8.49 points or 0.64% to 1,319.68.

China’s announcement at the end of the week that consumer inflation hit a 32-month high of 5.4% in March certainly didn’t help instill confidence about the outlook for commodities, and Beijing’s decision two days later to raise banks’ required reserves for the fourth time this year just added to the uncertainty. The Philadelphia Gold and Silver index dropped 10.24 points or 4.47% to 218.71.

Yanzhou Coal led the pack of value gains with a jump of US$1.64 to US$37.91. The coal producer is rumoured to be bidding for Australian coal miner Whitehaven Coal, valued at about US$3.7 billion. Chinese news agency Xinhua reported in March that Yanzhou’s coal sales surged 30.6% year-on-year in 2010 to 49.63 million tonnes and is forecasting sales of 54 million tonnes in 2011. 

Richmont Mines edged up US83¢ to US$8.32 per share on news from its Monique gold project, a potential small open-pit operation in the Val-d’Or region of Quebec, 10 km east of its producing Beaufor mine. Highlights from initial drilling include 6.76 grams gold per tonne over 12.9 metres, 8.07 grams gold over 10 metres, 4.25 grams gold over 17.1 metres, and 6.20 grams gold over 11.1 metres. Also, it will start production from its Francoeur gold mine in mid-year.

Minefinders rose US29¢ to US$15.60 on no news. On April 6, the company reported first quarter metal production of 17,812 oz. gold and 956,760 oz. silver, and forecasts full-year production of 65,000 to 70,000 oz. gold and 3.3 million to 3.5 million oz. silver. Northgate Minerals gained US13¢ to US$2.88 on news that it is on track to pour its first gold at the Young-Davidson mine, 60 km west of Kirkland Lake, Ont., in early 2012.  

Finally, Banro was up US13¢ to US$2.83 per share on news April 14 that construction at its wholly owned Twangiza gold project in the Democratic Republic of the Congo is on schedule, and commercial production is due to start in the fourth quarter.

U.S. most active issues

VOLUMEWEEK

(000s)HIGHLOWCLOSECHANGE

Alcoa*AA20957518.1916.3816.52-1.40

Freeport McMo*FCX10179557.6050.8651.17-5.81

Silver Wheatn*SLW8974147.1441.7242.61-4.30

Hecla Mining*HL567779.888.899.61-0.15

Coeur d Alene*CDE3912437.3530.5031.30-5.39

Rare Elemt Re*REE3908516.5514.2515.62+1.20

Kinross Gold*KGC3881916.6015.4015.67-0.93

Intl Coal Gp*ICO3756711.1610.0811.00+0.02

Potash C Sask*POT3676758.1555.4555.70-2.29

Goldcorp*GG3569454.7252.1554.18-0.23

U.S. greatest percentage change

VOLUMEWEEK

(000s)HIGHLOWCLOSECHANGE

Li3 Energy*LIEG15630.400.260.37+42.3

Linux Gold*LNXGF2070.050.020.04+33.3

SinoCoking Cl*SCOK30317.005.226.96+15.6

Richmont Mine*RIC22738.447.118.32+11.0

China Shen Zh*SHZ13376.615.806.26+9.6

Rare Elemt Re*REE3908516.5514.2515.62+8.3

Radius Gold*RDUFF6430.880.810.82+7.8

Silver Dragon*SDRG8020.180.150.17+6.2

Samex Mng*SMXMF7290.880.740.81+5.1

Banro Res*BAA15752.962.452.83+4.8

Anooraq Res*ANO21641.300.991.01-25.1

Paramount Gld*PZG142144.073.163.21-19.3

America West*AWSR121.501.201.29-17.8

Coeur d Alene*CDE3912437.3530.5031.30-14.6

Legend Intl H*LGDI8770.780.660.69-13.7

Tri-Valley*TIV125610.790.660.69-13.7

Solitario Res*XPL43003.542.583.03-12.9

Stillwater Mg*SWC1346623.6820.4420.55-12.6

Mines Managem*MGN11323.272.702.71-12.3

Bullion Monar*BULM2911.601.401.44-11.6

U.S. greatest value change

WEEK

VOLUMECLOSECHANGE

Yanzhou Coal*YZC146244137.91+1.64

Rare Elemt Re*REE3908549615.62+1.20

SinoCoking Cl*SCOK30311206.96+0.94

Richmont Mine*RIC22728588.32+0.83

China Shen Zh*SHZ13368926.26+0.55

Minefinders*MFN489865015.60+0.29

Central Fund*CEF1202145023.28+0.28

Westmoreland*WLB15022216.06+0.23

Banro Res*BAA15751462.83+0.13

Northgate Mnl*NXG129113042.88+0.13

Alliance Rs P*ARLP115444675.23-5.84

Freeport McMo*FCX10179462251.17-5.81

Teck B*TCK1738363851.94-5.41

Coeur d Alene*CDE3912390731.30-5.39

Pan Am Silver*PAAS2719886838.07-4.58

Mosaic*MOS1940887173.85-4.56

Mesabi Trust*MSB149148935.50-4.46

Cliffs Nat Rs*CLF1786875994.35-4.35

Silver Wheatn*SLW8974126342.61-4.30

Buenaventura*BVN921082339.21-3.91