Market news: U.S. Markets

U.S. equities remained resilient in the wake of the Jan. 2 settlement of the fiscal cliff debate, but the rally slowed slightly ahead of earnings season. The Dow Jones Industrial Average gained 0.4% to close at 13,488.43, while the S&P 500 Index also rose 0.4% to finish at 1,472.05. The Philadelphia Gold and Silver Index gained 0.5% to 163.36.

Topping the list of percentage gainers was Uranium Resources, which climbed 39% to US50¢ per share. The company announced it had extended and expanded its South Texas exploration agreement with Cameco Texas, a subsidiary of Cameco Corp. Both parties agreed to extend the exploration agreement to a five-phase, five-year exploration program that would include Tecolote, a 91.9 sq. km tract of land in South Texas. Cameco committed US$4.3 million to increase its interest to 70% in the expanded program, and would also fund and operate the project’s third phase exploration.

Results of a feasibility study for the Casino copper-gold-molybdenum deposit in the Yukon sent shares of Western Copper and Gold up 27% to US$1.69. The project carries an after-tax net present value at an 8% discount rate of $1.83 billion, at long-term metal prices of US$3 per lb. copper, US$1,400 per oz. gold, US$25 per oz. silver and US$14 per lb. moly. The after-tax internal rate of return was estimated at 20.1%. The deposit has proven and probable reserves of 8.9 million oz. gold, 4.5 billion lb. copper, 483 million lb. moly and 65 million oz. silver. The project is planned as an open-pit operation with a concentrator processing 120,000 tonnes per day, plus a gold heap-leach facility processing 25,000 tonnes per day.

Molycorp fell 17.6%, or US$1.82, to close the week at US$8.48 per share, after postponing the second phase of its Mountain Pass rare earth mine “until market demand, product pricing, capital availability and financial returns justify increases in production beyond phase one.” The Mountain Pass complex is designed to allow expanded production at a phase-two rate of as much as 40,000 tonnes a year of rare earth-oxide equivalent. The company says capital and operating costs remain a priority, and expects lower revenue and cash flow in 2013.

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