TSX back up: Learn to love the volatility

Market volatility continued to reign supreme as the TSX Composite Index bounced back from a previous period sell-off and surged 403 points to 12,075.09 for the Nov. 28 – Dec. 2 period.

The bounce back came after markets got past poor demand for German bonds, and decided that European leaders were showing signs of progressing on the debt crisis. Since that progress was tied to the increased likelihood of the European Central Bank (ECB) turning to some form of quantitative easing, the price of gold move up US$66 to US$1,751.30, as the metal as almost exclusively become a play on inflation fears.

The renewed interest in the yellow metal helped those that mined it as evidenced by the Global Gold Index climbing 9 points to 408.33 points.

The Capped Metals & Mining Index was up 83 points to 1,087.02 as copper rallied to US$3.57 per lb. Aluminum, nickel, lead and zinc prices were also higher, while the price of tin fell to US$9.04 per tonne.

The market applauded Moneta Porcupine Mines resource estimate for the three zones at its Golden Highway project east of Timmins. The company now has 33.5 million tonnes of indicated resources grading 1 gram gold for 1.07 million oz. of gold and 47.8 million tonnes grading 1.35 grams gold for 2.07 oz. All three zones remain open. Those numbers were strong enough to bolster the company’s market cap by 44% as its shares closed out the period trading for 23¢.

Pretium Resources also released stellar resource results and the market sent its shares up nearly as much as Moneta’s. Pretium’s shares climbed 43% to $12.02 after releasing a resource update from its Brucejack Project in northern British Columbia. The project now has measured and indicated resources of 9.3 million tonnes grading 16.92 grams gold and 105.6 grams silver for 5.06 million oz. of gold and 31.6 million oz. of silver. The company says a feasibility study for the project will get underway shortly.

Kimber Resources saw its shares climb 23% to $1.24 after announcing drill results from the Carmen Deposit at its Monterde project in Mexico. Results were highlighted by 16.7 metres grading 5.3 grams gold per tonne and 278.6 grams silver. That result came out of one of three holes that were drilled with an eye toward expanding and upgrading mineral resources at the deposit.

Karnalyte Resources shares didn’t fare so well. The potash company which is developing a mineral deposit is Saskatchewan, lost 12% of its market cap for the period. On Nov. 30 Karnalyte announced a bought financing deal that will see it issue 8.65 million shares and sell them for $13.30 a piece. The deal will raises $115 million, which it will put towards building the initial phase of its Wynyard Carnallite Project, which is expected to produce 625,000 tonnes of potash per year. Construction of the first phase is to begin in early 2012 with capex estimated at $593 million.