TSX falls…but only a little

The holiday shortened July 3-6 period was by no means a strong one for the senior board, but it could have been worse. The TSX Composite Index fell 68 points to 11,659.96 points with the sell-off coming amidst a flurry of bad news.

First there was disappointing U.S. jobs data, which triggered fears that the U.S. recovery was crumbling, then came word that the International Monetary Fund was downgrading its global economic forecast.

Markets may well have fallen further if it wasn’t for investor belief that the bad U.S. payrolls report will push the Federal Reserve to take more action to stimulate the economy.

Gold continued to follow equity prices and was off US$19 to US$1,578.90 per oz. as investors piled into short-term U.S. treasuries as a preferred safe haven. Miners took their cue from the metal as the Global Gold Index was down 4 points to 304.02 points.

The diversified miners didn’t fare much better as the Capped Metals & Mining Index was off 8 points to 876.45. That downward move followed the price of copper, which was off 9¢ to $3.41 per lb.

Nevada Copper was one of the better performers of the period as its shares were up 27% to $2.40 after Pala Investments Holdings said it was acquiring another 2.5 million of the company’s shares. The investment will buy Pala an additional 3.43% stake in Nevada Copper taking its total interest up to 37.6%. Pala is paying $1.90 per common share.

Peru-focused Dynacor Gold appointed of Denis Lachance to its board and its shares price jumped 27% to 57¢. Lachance has led several big mining development projects over the last 15 years. Most recently he was president of Koniambo Nickel, a joint venture between Xstrata Nickel and la Société Minière du Sud Pacifique in New Caledonia which developed one of the largest and highest-grade nickel resources of the world.

Hudbay Minerals delivered some bad news to Aquila Resources. Hudbay told its joint venture partner at the Back Forty Project that it was suspending development of the project due to other capital commitments. Aquila owns a 49% interest in the project and Hudbay owns a 51% of the project in the Upper Peninsula of Michigan. Back Forty is an advanced stage exploration project hosting a zinc and gold-rich volcanogenic massive sulphide deposit. Hudbay also terminated an exploration alliance with Aquila on four other properties. Aquila shares fell by 19% to 20¢ for the period.

And shares in Richmont Mines fell almost 18% to $3.89 after the company cut its reserve and resource outlook for its Francoeur mine in Quebec. The company said the forecast reduction is due to mineralization in the upper portion of the west zone being more discontinuous than its geological model led the company to believe. Proven and probable reserves now stand at 504,687 tonnes grading 4.78 grams gold for 77,580 ounces of gold versus 615,664 tonnes grading 6.91 grams gold for 136,749 oz. previously.