TSX capped by European debt fears

Concerns over the European debt crisis continued to keep North American markets from a healthy recovery as the TSX Composite Index could only claw out a meager 72 points gain over the Oct.3-7 period at 11,588.36 points. The small upward swing came despite some strong economic indicators such as a better than expected payrolls report in the U.S.

Volatility in the price of gold continued as the yellow metal recovered from its recent slide and moved higher by US$45 as it finished the period at US$1,670.80 per oz. That move, however, didn’t help gold miners as evidenced by the Global Gold Index sliding down 15 points to 387.76 points.

The better economic outlook did make for stronger copper, aluminum, nickel, tin, lead and zinc prices, and those higher prices rippled through to the companies that mine them as the Capped Metals & Mining Index was up 107 points to 929.39 points for the period.

Cline Mining saw its share price shoot up 48% to $1.67 in what was a busy period for the coal miner. First the company announced a financing deal will secure US$50 in debt for the company’s coffers then, three days later, it announced that Xstrata Coal was acquiring its Lossan metallurgical coal deposit for $40 million. Lossan sits in north eastern British Columbia and has of 240 million tonnes of coal in resources.

Talison Lithium also enjoyed a strong run, as its share price climbed 37% to finish up at $2.98. That lift came after the company that its first quarter sales were up 53% over last year, to 80,315 tonnes of lithium concentrate.

The discovery of gold at surface and a hostile take-over offer had Inter-Citic Minerals shares climbing. The company’s stock was up 36% to $1.06 after reporting that trenching at its Dachang Gold Project in China uncovered at least five separate parallel fault structures that have strike lengths of 800 to 1,500 metres and remain open to further expansion. Three days after the announcement of the discovery the company said it had rejected an unsolicited proposal from a large Chinese mining company to acquire all of its outstanding shares. Inter-Citic said the price offered valued the company’s shares at between $1.20 and $1.70 per share – a sum that management said undervalued the company.

Word that Paladin Energy had to shut down its processing plant at the Kayelekera Mine in Malawi didn’t hurt the company’s stock. Paladin said the plant was being shut down temporarily so that it could replenish sulphuric acid inventories. Those inventories needed to be re-stocked because its acid plant, which is being repaired because of ground movement, is re-starting ahead of schedule. By shutting down the processing plant acid stocks can be built up for the earlier start-up of the acid plant. The company also announced a private placement that will see it issue 56.8 million shares at a price of $1.24 per share, for gross proceeds of $70 million.