Toronto Stock Exchange
Tough times continue to rain down on Canadian markets as evidenced by the TSX composite index falling 251 points to 13,377 points for the May 9-13 period.
The big story of the week dealt with the market as the Canadian banks, along with some key pension funds, announced they want to take over the TMX Group for $3.6 billion. The offer represents a 24% premium over the price connected with the friendly merger between the London Stock Exchange and the TMX that was announced in February. While the latest offer would keep the TMX wholly Canadian, it would have to clear anti-trust laws to be successful, as the banks already own a competing trading system.
Inflation continued to be the key topic overhanging Canadian markets as an increase in inflation is expected when data is released in mid-May. Higher prices for food and energy, combined with stronger economics in Canada, are said to be the key drivers behind inflation.
Inflationary worries didn’t, however, help out gold miners as the Global Gold index was off 15 points to 362.70. That drop came as the gold price fell US$4 to US$1,492 per oz.
The Capped Metals & Mining index didn’t fare much better as the index was off 57 points to 1,365.43. The drop came with copper, nickel and tin all selling for less than what they started the week at. Lead and zinc prices were flat for the period while aluminum prices finished higher.
North American Palladium saw its share price tumble after it released first quarter results. The fall came after the company reported a net loss of $10.3 million. North American said production levels didn’t meet targets due to weather-related issues. Shares sank 29% to $3.80.
Operational issues and poor quarterly results were also behind the sell-off of Eastern Platinum‘s shares. The company posted a quarterly loss and suffered through a suspension of mining at its key Crocodile River platinum mine in South Africa. Trouble at the mine began after a workers’ union rejected a revised wage offer. The workers turned on the mine itself and did enough damage to cause flooding which forced an evacuation. Eastern Platinum says the mine is running again but that workers are still protesting and blocking the mine entrance to prevent non-striking employees from entering. Shares were off 14% to 92¢.
The impending merger between Medoro Resources and Gran Colombia Gold did little for either company’s market cap. Grand Colombia was off 21% to 91¢ while Medoro shares fell 15% to $1.40. Shareholders are slated to vote on the merger in early June. Gran Colombia holds 95% of the former Frontino gold and silver assets while Medoro holds the Marmato gold project which sits on the same mid-Cauca gold belt as Frontino’s assets in Colombia.
TSX most active issues
VOLUMEWEEK
(000s)HIGHLOWCLOSECHANGE
Eastern PlatinELR789021.120.750.92-0.15
Equinox MinlsEQN423188.118.088.09-0.01
Uranium OneUUU251134.293.453.80-0.33
Lundin MngLUN237819.028.528.56-0.43
Emed MiningEMD190800.190.150.16-0.02
Kinross GoldK1830514.7013.5313.81-0.73
Teck BTCKB1740249.5344.2944.85-3.95
Barrick GoldABX1726546.3543.0543.63-1.79
GoldcorpG1574648.4845.3046.28-1.05
Yamana GoldYRI1491111.7211.2311.46+0.03
TSX greatest percentage change
VOLUMEWEEK
(000s)HIGHLOWCLOSECHANGE
BRC DiamondCrBCD4110.130.080.12+20.0
Diamond FieldsDFI670.340.290.34+17.2
Aeroquest IntlAQL1880.840.730.84+16.6
Dalradian ResDNA12981.681.401.68+15.0
Solitario ResSLR583.092.412.99+14.1
Canarc ResCCM5830.180.140.17+13.3
Foraco IntlFAR4922.972.652.88+12.5
Allied GoldALG580.560.510.56+12.0
Revolution ResRV13410.720.610.67+11.6
Guyana GldfldsGUY17408.828.108.78+9.7
North Am PallPDL118585.583.713.80-28.8
Talon MetalsTLO6512.221.731.77-21.3
Gran ColombiaGCM24771.200.910.91-20.8
Powertech UranPWE14920.230.180.19-20.8
Gryphon GoldGGN8050.170.120.13-18.7
Velocity MinlsVLC200.160.160.16-15.7
Medoro ResMRS22441.721.401.40-14.6
Kimber ResKBR1501.401.201.20-14.2
Eastern PlatinELR789021.120.750.92-14.0
St. AugustineSAU6380.830.710.72-13.2
TSX greatest value change
WEEK
VOLUMECLOSECHANGE
Labdr I-Ore RoLIF_U31681970.26+3.26
Centerra GoldCG288511219.15+0.95
Guyana GldfldsGUY17400298.78+0.78
Horizns G BearHGD337685811.34+0.70
Central Gold-TGTU_U3381054.00+0.60
Russell MetalsRUS67743425.68+0.43
Solitario ResSLR578522.99+0.37
Primero MngP14102564.97+0.37
Tanz Roy ExpTNX2186206.65+0.37
Northern Dyn MNDM56847211.87+0.35
Teck BTCKB1740212444.85-3.95
AgriumAGU407648578.00-3.55
Teck ATCKA2132846.55-3.08
Coeur d AleneCDM47723924.45-2.37
Cameco CorpCCO699374425.44-2.08
Allied NevadaANV111890231.24-2.03
Potash Cp SaskPOT957027949.92-1.88
Barrick GoldABX1726537543.63-1.79
Silver Std ResSSO193713627.37-1.71
Silver WheatonSLW1280837033.03-1.61
TSX Venture Exchange
The S&P-TSX Venture composite index had another tough week, dropping 50.38 points in the May 9-13 period to 2,038.22, the lowest in 2011 and a level not seen since last November. Volume was noticeably lower as well, averaging 122 million shares traded daily. And the gap between the bears and bulls widened further, with 121 juniors hitting 52-week lows and only 20 touching new highs.
First Lithium Resources was by far the most traded company despite not releasing any news in the period. The company was forced to clarify that it had no material changes as the company saw 45 million shares traded in the period and climbed up 7¢ before retreating and ending up 2¢ at 14¢. The company’s last news was on April 25, when it announced results from a deepened hole at its Mollie River gold project in Ontario and concluded that no further work would be done on the claims where the hole was drilled.
Next in overall volume, Ultra Lithium saw 21.9 million shares traded as the company’s stock nearly doubled in mid-day trading before ending up 1.5¢ to close at 7.5¢, also on no news. The company has interests in properties in Nevada, Ontario and Alberta, with the Zigzag lithium-rare metals project in Ontario being the only one to see recent work. Canadian Orebodies is currently earning in 80% of the project while Ultra Lithium can earn the remainder. March drill results showed anomalous levels of tantalum on the property.
Topping the value category, Weststar Resources bucked the general downward trend and gained 40¢ to finish at $1.30 after not closing down once in the period. Weststar, however, released no news in the week, though it recently arranged a $9-million financing and in late March secured an option agreement to earn 80% of the La Paloma gold-silver project in Jalisco, Mexico.
Rare earth plays also ranked high on the value gains, with Geomega Resources up 29¢ to $3.44 and Tasman Metals up 26¢ to $4.83. In keeping with the pattern, neither company released news in the period. However, Geomega recently amended an option agreement for the Montveil and Pump Lake properties in Quebec to secure full ownership of Montveil, and Tasman recently announced positive metallurgical results from its Norra Karr heavy rare earth element and zirconium project in Sweden.
Meanwhile, Great Quest
Metals gained 29¢ to end at $3.20 after announcing it had started an air-core drilling program on its Tilemsi phosphate project in Mali that would include up to 800 shallow holes. Great Quest also said it had completed the first hole of a 16-hole, 2,500-metre drill program at its Sanoukou gold project, also in Mali. Previous air-core drill results from Sanoukou include 19 metres of 2.59 grams gold per tonne and 7 metres averaging 3.65 grams gold.
TSX-V most active issues
VOLUMEWEEK
(000s)HIGHLOWCLOSECHANGE
Mountain CaptlMCI450100.290.100.14+0.03
Ultra LithiumULI218540.100.050.08+0.02
RPT UraniumRPT118770.160.110.12-0.02
Orbite Expl AORTA116604.073.003.05-0.94
Great WesternGWG97970.860.730.79+0.02
NQ ExplNQE94180.120.100.11-0.01
Malbex ResMBG90290.500.370.38-0.05
Golden Dawn MlGOM83940.130.090.10+0.01
Copper Fox MtlCUU77132.511.952.18+0.16
Afri-Can MarinAFA71300.110.070.08-0.01
TSX-V greatest percentage change
VOLUMEWEEK
(000s)HIGHLOWCLOSECHANGE
Anglo-BomarcANB440.250.200.25+78.5
Prominex ResPXR5440.080.050.08+60.0
Westar ResWER9071.300.871.30+44.4
Advanced PrimaAPD600.360.250.36+44.0
Midasco CapMGC3060.170.120.17+41.6
Richmond MnlsRMD47880.040.030.04+33.3
Dianor ResDOR7010.050.040.04+33.3
Ultra LithiumULI218540.100.050.08+33.3
AndeanGoldAAU4020.250.180.25+31.5
Tawsho MngTAW200.170.170.17+30.7
Nevada Geo PowNGP58410.480.200.21-55.3
Troymet ExplTYE46960.120.060.09-47.0
Calypso UranCLP710.250.200.20-28.5
Planet ExplPXI1200.360.260.26-27.7
Crescent ResCRC3560.340.240.24-27.2
Mustang MinlsMUM17710.320.220.22-26.6
Golden Reign RGRR6411.150.860.86-25.2
Orbite Expl AORTA116604.073.003.05-23.5
Lago Dourado MLDM6110.860.600.69-22.4
Ring of Fire RROF30520.180.130.14-22.2
TSX-V greatest value change
WEEK
VOLUMECLOSECHANGE
Westar ResWER9065421.30+0.40
Great Quest MeGQ12443473.20+0.29
Geomega ResGMA2357863.44+0.29
Tasman MetalsTSM14483804.83+0.26
Loncor ResLN4528003.17+0.22
Energold DrillEGD4994604.20+0.21
Copper Fox MtlCUU77127532.18+0.16
Copper OneCUO13497900.72+0.15
Bear Creek MngBCM13402117.64+0.14
Rio Alto MngRIO53875682.25+0.14
Rare Elemnt RsRES51980111.43-1.27
Orbite Expl AORTA116601123.05-0.94
Chesapeake GldCKG4936512.03-0.67
Mirasol ResMRZ5064844.68-0.51
Newstrike CapNES21797562.19-0.42
Atac ResATC9930966.50-0.41
Richfield VentRVC7173408.26-0.34
Pac Booker MinBKM291307.17-0.33
Golden Reign RGRR6411910.86-0.29
Batero GoldBAT4281033.58-0.27
U.S. markets
U.S. stocks closed down for the second week in a row with worries about global growth, the euro-zone debt-crisis, and the coming end in June of the Federal Reserve’s second round of quantitative easing. Continued upheaval and heavy selling in the commodities sector dominated the headlines. The Dow Jones industrial average shed 42.99 points to close the May 9-13 week at 12,595.75, while the S&P 500 index fell 2.83 points to 1,337.77. The Philadelphia Gold and Silver index lost 6.93 points to 195.26.
Cliffs Natural Resources led the decliners with a loss of US$4.56 to US$84.37 per share. On May 12 Cliffs announced that it had completed its acquisition of Consolidated Thompson Iron Mines for $17.25 per share. Cliffs financed the $4.9-billion (including net debt) transaction through committed financing, including a US$1.25-billion term loan, US$750 million in bridge financing and available cash on hand.
Teck Resources dropped US$3.89 to US$46.36 per share. The miner announced on May 8 that employees at its Fording River operation in British Columbia had ratified a new five-year collective agreement, replacing an agreement that expired on April 30. The new agreements at its Elkview and Fording River operations mean that Teck will incur a one-time charge in the second quarter of about $40 million, of which about one-half will be a non-cash accrual related to enhancements to pension and post-retirement benefits.
Fertilizer giants Mosaic and Agrium were down US$3.82 to US$67.35 and US$3.76 to US$80.43, respectively. Mosaic announced the start of a secondary offering of 100 million shares with Cargill stockholders and certain debt holders related to Cargill’s exchange of its roughly 64% interest in Mosaic. Agrium, meanwhile, reported that it had completed the divestiture of the majority of the commodity management businesses of AWB Ltd. to Cargill. The cash received from the sale totals US$677 million, which includes the repayment of US$363 million of working capital funding Agrium provided to the commodities management businesses since Dec. 15, 2010.
U.S. most active issues
VOLUMEWEEK
(000s)HIGHLOWCLOSECHANGE
Alcoa*AA11138617.6216.7517.10-0.02
Freeport McMo*FCX10813052.3047.6048.27-1.40
Silver Wheatn*SLW8018237.7232.4334.10-1.72
Hecla Mining*HL587978.827.888.13+0.04
Intl Coal Gp*ICO5522214.4914.4514.450.00
Barrick Gold*ABX5281848.1444.2545.01-1.83
Kinross Gold*KGC4295715.2313.8414.24-0.77
Potash C Sask*POT4046355.0550.0951.58-1.87
Goldcorp*GG3939350.4446.8747.76-1.13
North Am Pall*PAL354325.773.823.90-1.63
U.S. greatest percentage change
VOLUMEWEEK
(000s)HIGHLOWCLOSECHANGE
America West*AWSR1421.200.801.20+20.0
Canarc Res*CRCUF1290.180.140.18+20.0
Solitario Res*XPL9973.292.503.18+20.0
Uranerz Energ*URZ38993.262.762.93+6.9
Tanz Roy Exp*TRE18816.896.366.89+5.1
Goldfield*GV570.420.390.41+5.1
Mesabi Trust*MSB69333.1830.1931.85+4.7
Northgate Mnl*NXG108882.962.702.81+4.0
Ur-Energy*URG4271.661.501.57+3.9
Alumina Inc*AWC63010.299.479.79+2.6
North Am Pall*PAL354325.773.823.90-29.4
Radius Gold*RDUFF4380.750.480.54-22.8
Linux Gold*LNXGF700.050.040.04-20.0
Silver Dragon*SDRG10690.190.130.13-18.7
Mag Silver*MVG20111.349.579.57-13.0
Midway Gold*MDW4361.891.591.59-12.6
Starfield Res*SRFDF840.070.060.07-12.5
Kimber Res*KBX9511.501.221.25-11.3
US Gold*UXG29487.916.656.68-11.0
Alberta Star *ASXSF730.440.400.41-10.8
U.S. greatest value change
WEEK
VOLUMECLOSECHANGE
Mesabi Trust*MSB69332431.85+1.44
Solitario Res*XPL9966023.18+0.53
Yanzhou Coal*YZC99742436.19+0.47
Tanz Roy Exp*TRE18814916.89+0.34
Alumina Inc*AWC6303079.79+0.25
MDU Res*MDU405537423.31+0.22
America West*AWSR1420821.20+0.20
Uranerz Energ*URZ38994292.93+0.19
Richmont Mine*RIC29682877.88+0.16
Compass Mnls*CMP31078491.60+0.13
Cliffs Nat Rs*CLF1953842684.37-4.56
Teck B*TCK2199510146.36-3.89
Mosaic*MOS2751647267.35-3.82
Agrium*AGU328777880.43-3.76
Peabody Enrgy*BTU3150376858.45-3.69
Randgold Res*GOLD321725576.12-3.41
Alliance Rs P*ARLP76844769.80-3.19
BHP Billi-BBL*BBL1021710575.76-3.00
BHP Billi-BHP*BHP2404264492.63-2.87
Alpha Nat Res*ANR2465813248.44-2.77
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