TSX continues to make ground

TSX Composite Index continued to show strength on the back of strong commodity prices as the Index rose 28 points for the holiday shortened Oct. 12-15 period to finish at 12,609.07 points.

The rise came as the Canadian economy showed some positive growth signs as exports were up 3.1%, and manufacturing sales up 2% for August. Future growth, however, is expected to be hampered by a higher loonie which will strains exports. The Canadian dollar moved into near parity with the US greenback over the period.

The continued softening of the US dollar had the yellow metal up US$19 to US$1,367.50. For the most part, however, gold miners failed to participate in the upswing as evidenced by the Global Gold Index finishing the period where it began at 402 points.

Unlike its cousins in the gold sector, diversified miners represented in the Capped Metals & Mining Index continued to rise in step with growing metal prices. The Index was up 20 points to 1,232.35 in a period that saw copper up a penny to US$3.79 per lb. The price of tin and lead were also higher and zinc finished up 3¢ at US$1.08 per lb. Aluminum fell a penny to US$1.07 per lb.

Marengo Mining is one step closer to getting its Yandera copper, molybdenum and gold project into production. The company announced it had signed a memorandum of understanding with a Chinese firm that covers financing and construction of the project which sits in the Madang Province of Papua New Guinea. Marengo is currently in the midst of completing a feasibility study on the project and said the Chinese firm would be responsible for arranging for 70% of the required funding from Chinese banks. Marengo expects to start construction in the first half of 2012. The company’s shares were up 35% to 23¢ for the period.

Aquila Resources and HudBay Minerals updated the market on the Back Forty Project in the Upper Peninsula of Michigan saying the project now has 18.1 million tonnes of measured and indicated resources and 3.2 million tonnes of inferred. The company’s also announced results from the first deep holes drilled at the project which returned 6.02 meters of 8.14 grams gold, 312.2 grams silver and 8% zinc; and 69.7 meters grading 1.1 grams gold, 27 grams silver, 0.41% copper and 1.3% zinc. Aquila shares were up 33% for the period to 65¢ while Hudbay shares were up 7% to $16.65.

Zincore Metals didn’t have such positive news to report to the market. Instead its shareprice fell after it announced that a director, Ignacio Rosado, was resigning from the company’s board. Zincore shares were off 22% to 47¢ for the period.

Dalradian Resources disappointed the market with results from its Curraghinalt deposit in Northern Ireland. The highlight intercept came from infill drilling which intercepted 1 metre grading 59.88 grams gold. Not enough to stop the market from sending its share price down 16% to $2.29.