Toronto Stock Exchange, Dec. 2-6

The S&P/TSX Composite Index fell 113 points to 13,280.72 for the period, despite positive news from Canada’s neighbour to the south.

The U.S. Labor Department reported 203,000 jobs were added in November, beating expectations. The news had investors worried the Federal Reserve could taper its monthly bond purchases sooner, which would be bad for gold.

As such the gold price fell US$21 to US$1,229 per oz., and the S&P/TSX Global Gold Index shed 9 points to finish at 150.96.

The diversified miners represented in the S&P/TSX Capped Diversified Metals & Mining Index didn’t fare much better, as the Index was down 19 points to 728.55, despite the copper price being up 5¢, to finish at US$3.25 per lb. 

Verde Potash told the market it had no idea why its stock was up 57% over the period, but the announcement only fuelled another round of buying, as its shares gained another 65% since the announcement and traded for 62¢ at press time. The company is planning to build a potash mine in Brazil.

Shares in Vancouver-based South American Silver also got a lift. This time the reason seems to be the return of founder Ralph Fitch to the helm. Fitch has been reappointed president and CEO, replacing Phillip Brodie-Hall — who served as interim president and CEO since August of last year. Brodie-Hall came in at a tough time, arriving after the company had its main mining operation, Malku Khota, nationalized in Bolivia. South American Silver shares were up 48% to $1.18 for the period.

A takeover offer from Australian-based Mamba Minerals lifted Champion Iron Mines’ market fortunes. The deal values Champion at 39¢ per share, or $59.8 million on a fully diluted basis, and represents a 72% premium to Champion’s 20-day, volume-weighted average price. Mamba will be getting the Fire Lake North project in the Labrador Trough, and the deal will leave Champion shareholders with 50.5% of Mamba on a fully diluted basis. The combined entity is to be called Champion Iron Ltd., with $25 million in cash to play with. The transaction is expected to close next April. Champion shares were up 33% to 29¢ for the period.

The news wasn’t so good for Colossus Minerals, which is again delaying production start-up at its Serra Pelada gold–platinum–palladium project in Brazil. Complications with dewatering caused the first delay in mid-November, pushing back its first-production date from late 2013 to the second quarter of 2014. Now the revised date is in jeopardy, as it has stopped underground development to de-risk the project. The company couldn’t raise the funds to close a US$70-million funding shortfall. Colossus shares were down 45% to 17¢.

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