Market news (June 06, 2011)

Toronto Stock Exchange

The abbreviated May 24-27 trading week saw the TSX Composite Index gain 145 points to close at 13,797.59. The lift came as the Bank of Canada contemplated interest rate hikes, while the greenback fell on weaker-than-expected U.S. consumer spending and housing data. 

The yellow metal gained US$23 and reached US$1,536.50 per oz., which helped the Global Gold Index rise 14 points to 389.62. The Capped Metals & Mining Index, however, slumped 12 points to 1,417.56. 

The week’s biggest percentage gainer was Grandview Gold, surging 33% to 8¢ per share, on news it signed a diamond drill contract for a 10-hole drill program at its 16-sq.-km Dixie Lake gold property in Ontario. The program will focus on validating and expanding the historic resources, and is expected to start in mid-June. Dixie Lake has a non-compliant resource of 1.1 million tons grading 0.1 oz. gold per ton. 

Trailing close behind, Kimber Resources gained 31% to close at $1.64 per share on news of high-grade intercepts from its ongoing drill program at the Carmen gold-silver deposit at its Monterde property in Mexico. The best hole out of the eight released returned 5.2 metres of 51.9 grams gold per tonne and 1,076.7 grams silver per tonne, including 1.3 metres of 188.5 grams gold and 3,700 grams silver from the Hilos structure within the deposit. 

Uranium junior UEX Corp also saw its shares jump 31% to $1.18, however, on no news. The company said in early May that a drill result from its joint-venture Shea Creek project with Areva in Saskatchewan expanded the mineralization at the Kianna deposit. The hole cut 25.1 metres grading 1.28% uranium oxide. 

Potash miners took the two top spots for the week’s biggest value gainer. Agrium advanced $6.61 to $84.46 as it reached a binding agreement to buy International Mineral Technologies (Tetra Micronutrients), a company that produces and sells liquid plant nutrition and dry micro nutrient products. The transaction is expected to close by mid-July. 

Potash Corp. of Saskatchewan added $4.11 to close at $54.69. On May 24, the miner released a second quarter market analysis report, underlining how recent growth in potash consumption has come mostly from developing countries that are tackling the need for balanced soil nutrition to boost yields. The company estimates that global demand will increase 55-60 million tonnes for 2011, with global operational capability at about 61 million tonnes. 

A day later, PotashCorp announced a $500,000 cash donation to support relief efforts in Joplin, Missouri after a tornado hit the small community on May 22, where the company owns and operates a feed phosphate business. 

TSX most active issues

VOLUMEWEEK

(000s)HIGHLOWCLOSECHANGE

Equinox MinlsEQN1356948.127.607.60-0.47

Lundin MngLUN895058.726.817.16-1.68

Kinross GoldK2496115.8214.5715.76+1.21

Eastern PlatinELR119241.070.991.03+0.07

Capstone MngCS114583.553.103.48+0.08

Yamana GoldYRI1126512.5811.7912.51+0.76

Teck BTCKB976950.9547.1750.32+1.63

MagIndustriesMAA93380.220.220.220.00

Barrick GoldABX923846.8044.8946.36+2.10

Sherritt IntlS86967.126.557.08+0.21

TSX greatest percentage change

VOLUMEWEEK

(000s)HIGHLOWCLOSECHANGE

Grandview GldGVX2110.080.070.08+33.3

Kimber ResKBR5371.711.171.64+31.2

UEX CorpUEX19501.190.911.18+31.1

Crosshair E&MgCXX12250.910.680.91+30.0

MinemakersMAK1050.640.500.64+28.0

North Am En PaNOA1449.427.769.25+22.6

Ur-EnergyURE19661.771.421.75+21.5

Gryphon GoldGGN7640.180.140.17+21.4

Sulliden ExplSUE58282.472.002.43+20.3

Mega UraniumMGA22730.550.440.55+19.5

Cluff GoldCFG391.551.201.44-28.0

Chalice Gold MCXN550.380.350.35-27.0

Lundin MngLUN895058.726.817.16-19.0

CIC EnergyELC4704.003.343.40-15.4

Golden PeaksGL220.730.640.64-13.5

OrocobreORL1532.402.182.30-9.8

Silver Bear RsSBR2330.900.800.80-9.0

Canadn ZincCZN11890.910.800.82-8.8

Polaris MinlsPLS1130.980.850.85-8.6

Corona GoldCRG981.141.031.05-7.8

TSX greatest value change

WEEK

VOLUMECLOSECHANGE

AgriumAGU281065784.46+6.61

Potash Cp SaskPOT771801054.69+4.11

Newmont MngNMC2095455.16+2.58

First MajesticFR398925320.03+2.53

Agnico-EagleAEM208742863.45+2.52

Coeur d AleneCDM15169026.70+2.14

Barrick GoldABX923840246.36+2.10

Cameco CorpCCO385496528.30+1.94

Teck ATCKA1873951.50+1.85

Detour GoldDGC108921930.39+1.78

First QuantumFM1657548131.01-1.87

Lundin MngLUN895046267.16-1.68

Labdr I-Ore RoLIF_U18018172.41-1.44

Horizns G BearHGD16556409.82-0.83

Inmet MiningIMN79842266.47-0.78

CIC EnergyELC4703403.40-0.62

Imperial MetalIII5329620.39-0.56

Cluff GoldCFG393291.44-0.56

Karnalyte ResKRN8385011.18-0.56

Equinox MinlsEQN1356942747.60-0.47

TSX Venture Exchange

The S&P/TSX Venture Composite Index rose 69.23 points to 2,100.67 over the May 24-27 period, as slightly higher metals prices buoyed many junior mining companies. A number of Venture companies enjoyed a small rally over the short trading week after the strong sell-off in commodities earlier in May, however 133 companies still hit new 52-week lows compared with just 55 new highs. Trading volume over the period remained low, averaging 112 million shares traded daily.

Orbite Exploration saw the most activity on the exchange after producing the first samples of aluminum from its Cap-Chat pilot plant in Quebec. Shares of the company rose 21% or 74¢ to close at $4.13 by the end of the week. Orbite says it has conclusively demonstrated the viability of its patented technology for producing alumina, the fine white powder used to make aluminum, by extracting it from clay. The company owns rights to 35 sq. km of land prospective for the alumina-rich clay in Quebec’s Grande-Vallée region, and hopes to eventually supply 20% of the world’s high-grade alumina.

Canaco Resources had the second largest value gains after releasing more stunning drill results from its Handeni gold project in Tanzania. The company drilled 17 metres of 23.96 grams gold per tonne from a new gold lode west of the main Magambazi zone. Canaco is also spinning out its 70% interest in the Harvest copper-gold-silver VMS project in Ethiopia into a new explorer called
Tigray Resources. Significant drill
results from Harvest include 52.1 metres grading 4.1% copper, 1.55 grams gold and 25.9 grams silver, starting from a depth of 45 metres. 

Rio Alto Mining was the third-biggest value gainer, rising 39¢ to $2.63. The company poured the first gold from its La Arena gold oxide mine in north-central Peru on May 6 and expects to reach commercial production next quarter. It is targeting gold production of 75,000 oz. in 2011. Rio Alto optioned the advanced-stage project in June 2009 from Iamgold, which remains a significant Rio Alto shareholder.

Struggling coal producer Cobalt Coal led the exchange among percentage gainers, doubling over the week to 6¢. Shareholders reacted happily to news that the company’s continuous mining machine at its Westchester coal mine in West Virginia had been fixed following a malfunction. Several recent production shutdowns at the mine have caused a cash crisis for Cobalt, which is having trouble raising money to meet short-term infrastructure upgrades, interest payments on debt and administrative costs.
It is now seeking approval to roll back its shares 1-for-10 next month.

TSX-V most active issues

VOLUMEWEEK

(000s)HIGHLOWCLOSECHANGE

Golden Dawn MlGOM196600.190.140.15+0.02

Orbite Expl AORTA131644.323.444.13+0.74

Cobalt CoalCBT106480.060.030.04+0.02

Rio Alto MngRIO97092.782.182.63+0.39

Allana ResAAA80921.951.771.86+0.10

Seafield ResSFF80190.340.220.30+0.09

Global HunterBOB69220.140.120.12+0.01

Western PotashWPX49311.501.191.38+0.20

Apoquindo MnlsAQM48830.690.580.67+0.08

Rainy River RsRR470410.199.0010.17+1.07

TSX-V greatest percentage change

VOLUMEWEEK

(000s)HIGHLOWCLOSECHANGE

Cobalt CoalCBT106480.060.030.04+100.0

GoldmincoGCP41140.090.050.09+80.0

DNI MetalsDNI8390.270.170.25+47.0

Invenio ResIVO3730.190.160.19+46.1

Seafield ResSFF80190.340.220.30+42.8

Stratabd MnrSB1340.140.110.14+40.0

Cadillac MngCQX1160.140.090.14+40.0

Paragon MinlsPGR1520.140.100.14+40.0

Module ResMLE1200.110.090.11+37.5

BE ResBER21310.170.120.15+36.3

Garrison IntlGAU11080.030.020.03-40.0

Mainstream MnlMJO20990.090.050.06-33.3

Rocmec MiningRMI15510.370.010.28-30.0

Hudson River MHRM100.090.070.07-30.0

Oro Nevada ResONV1750.060.050.05-28.5

Intigold MinesIGD3230.460.330.35-27.0

Penteco ResPEN9140.230.170.17-26.0

Pac Arc ResPAV100.190.170.17-26.0

Fox ResFAX100.460.460.46-25.8

Cariboo RoseCRB1170.320.260.26-23.5

TSX-V greatest value change

WEEK

VOLUMECLOSECHANGE

Rainy River RsRR470409910.17+1.07

Orbite Expl AORTA131638114.13+0.74

Richfield VentRVC8909179.02+0.64

Great Quest MeGQ7233304.40+0.60

Canaco ResCAN38322244.43+0.59

Lumina CopperLCC920616.92+0.54

Kaminak GoldKAM7360163.74+0.49

Mirasol ResMRZ3614335.98+0.48

North CountryNCG13715841.97+0.42

Rio Alto MngRIO97089212.63+0.39

Bear Creek MngBCM28683166.98-0.75

Hana MngHMG20203192.24-0.42

Alderon ResADV4457452.79-0.25

Zimtu CapitalZC120751.50-0.25

New Millen CapNML7243182.75-0.20

Riva GoldRIV2203391.40-0.16

Fox ResFAX100000.46-0.16

Huldra SilverHDA1435551.15-0.15

Quest Rare MnlQRM9796477.58-0.14

Intigold MinesIGD3228100.35-0.13

U.S. markets

U.S. markets racked up their fourth straight week of losses with the Dow Jones Industrial Average shedding 0.56% to close at 12,441.58 and the S&P 500 Index dropping 0.16% to 1,331.10. Weaker-than-expected U.S. consumer spending and housing data did not inspire much confidence in the economic recovery. Europe’s debt crisis, however, further boosted the appeal of gold, with spot gold peaking at US$1,538.10 per oz., its highest level since May 4.

Randgold Resources and Buenaventura were the two top gold performers during the May 23-27 trading week. Randgold increased US$3.34 to US$81.18 on no news, while Buenaventura advanced US$3.27 to US$44.34, despite the start of a strike at its Orcopampa mine in Peru.

The biggest gains of the week went to the potash players. Agrium, which on May 25 attended celebrations in New York to mark its 15th year of being listed on the Big Board, gained US$6.51 to US$86.45. The company announced last week that it had reached a binding agreement to acquire International Mineral Technologies, or Tetra Micronutrients, a Nebraska-based company specializing in the production, marketing and distribution of custom liquid plant nutrition and dry micro nutrient products, predominantly zinc sulphate. Tetra Micronutrients’ annual revenues are more than US$60 million. 

Mosaic, meanwhile, advanced US$4.62 to US$70.04. On May 25 Mosaic announced that it had completed the transaction to split off and distribute Cargill’s stake in the company – a move Mosaic says will improve its “strategic and financial flexibility and increase liquidity of stock.” Potash Corporation of Saskatchewan claimed the third spot with a jump of US$3.95 to US$55.99.

Finally, America West Resources surged 33.3% to US$1.80 per share following news May 26 that it had completed mine development and started full production at its Horizon coal mine, 193 km southeast of Salt Lake City, Utah. The company estimates thermal coal reserves under lease at the Horizon mine add up to more than 16 million recoverable tons.

U.S. most active issues

VOLUMEWEEK

(000s)HIGHLOWCLOSECHANGE

Freeport McMo*FCX10513151.9046.6751.73+3.35

Alcoa*AA8857116.5515.8316.48+0.22

Mosaic*MOS6052470.7565.1670.04+4.62

Silver Wheatn*SLW5055337.0034.1136.53+1.45

Barrick Gold*ABX3874347.9145.0247.39+1.91

Potash C Sask*POT3872956.7551.3055.99+3.95

Hecla Mining*HL359488.617.898.50+0.47

Kinross Gold*KGC3291916.2014.6416.11+1.17

Peabody Enrgy*BTU3072362.5956.0961.62+2.82

Alpha Nat Res*ANR2938753.9948.6353.07+3.02

U.S. greatest percentage change

VOLUMEWEEK

(000s)HIGHLOWCLOSECHANGE

America West*AWSR3681.811.221.80+33.3

Kimber Res*KBX20921.791.181.68+31.2

US Antimony*UAMY9022.851.722.70+28.5

Crosshair E&M*CXZ1540.930.700.93+27.4

Uranium Res*URRE100591.981.501.94+22.7

North Am En P*NOA5299.637.609.51+21.9

Uranium Ener*UEC8523.522.733.30+20.0

Ur-Energy*URG5011.801.471.80+20.0

Denison Mines*DNN6962.361.972.36+16.2

Alberta Star *ASXSF140.450.400.45+15.3

Li3 Energy*LIEG25460.390.280.29-21.6

Linux Gold*LNXGF990.050.040.04-20.0

Am Engy Field*AEFI4330.300.220.26-13.3

Legend Intl H*LGDI1160.660.570.60-7.6

Geovic Mng*GVCM2680.540.470.47-6.0

Quaterra Res*QMM501.531.411.42-5.3

Miranda Gold*MRDDF2410.490.460.48-4.0

Santa Fe Gold*SFEG3091.100.950.96-4.0

Cream Mnrls*CRMXF580.250.230.24-4.0

El Capitan Pr*ECPN39060.920.560.80-3.6

U.S. greatest value change

WEEK

VOLUMECLOSECHANGE

Agrium*AGU249421186.45+6.51

Mosaic*MOS6052390170.04+4.62

Potash C Sask*POT3872859855.99+3.95

Cliffs Nat Rs*CLF1407972989.67+3.66

Freeport McMo*FCX10513085551.73+3.35

Randgold Res*GOLD208828781.18+3.34

Buenaventura*BVN458081244.34+3.27

Soc Quim&M Ch*SQM278820060.67+3.17

Massey Energy*MEE1582432964.02+3.02

Alpha Nat Res*ANR2938663553.07+3.02

Alum Cp China*ACH48343321.49-0.50

AngloGold Ash*AU934703945.50-0.30

SinoCoking Cl*SCOK6252425.93-0.18

Natural Rs Pt*NRP22315832.16-0.11

DRDGOLD*DROOY5753725.18-0.10

Quaterra Res*QMM498721.42-0.08

Li3 Energy*LIEG25464320.29-0.08

Golden Star*GSS107525782.62-0.06

Legend Intl H*LGDI1162560.60-0.05

Am Engy Field*AEFI4329430.26-0.04