TSX falls off as gold price dips

TSX Composite Index was down 118 points to 11,949.49 points for the Oct. 17 – 21 period as markets continues to be jittery in the shadow of Europe’s debt woes.

Such nervousness failed to bolster gold prices, however, as the metal fell US$47 to US$1,636.10 per oz. and the Global Gold Index dropped 28 points to finish up at 373.09 points.

The Capped Metals & Mining Index was also off, as it fell 47.61 points to 957.73. The drop came as the prices for copper, aluminum, nickel, tin, lead and zinc were all softer.

Agnico-Eagle Mines indefinitely shut down its Goldex gold mine in Val d’Or Quebec due to the instability of the mine. The problem at the mine had to do with the failure of a weak volcanic rock unit in the hanging wall letting groundwater to seep into the mine. While Agnico is leaving open the possibility of repairing the mine in the future the uncertainty surrounding such and endeavor led to its having to write-off the mine. That means the company is taking US$260-million charge, or roughly US$170-million after-tax, plus costs of remediation. Agnico shares fell 26% to $44.30 for the period.

Laramide Resources saw its share price rise 25% to 89¢ for the period after updating the market on its permitting efforts at its La Sal Project in San Juan County, Utah. Laramide says a final Environmental Assessment has been prepared and was made public, which initiates the final 30 day public comment period. A decision with respect to the permit is expected shortly thereafter. La Sal sits in Utah’s Lisbon Valley uranium district and was previously developed by the former Homestake Mining Company. Laramide is planning for underground uranium exploration and development activities at the project which sits 64-km from Denison’s White Mesa mill at Blanding, Utah.

Aura Minerals’ search for a new chief executive is over, and the market appeared t to like its choice. Aura shares were up 13% to $1.53 after announcing that Jim Bannantine would replace interim chief executive Tom Ogryzlo. Bannantine is a civil and mechanical engineer with an MBA from the Wharton School of Business. With 20 years of industry experience he has over seen pipeline and infrastructure projects in some of the key regions that Aura operates in such as Brazil and Honduras.

Jaguar Mining revised its production guidance for the year and saw its share price fall by 25% to $4.10. The company said that based on actual production during the first three quarters of the year, the current rate of production at its three mining operations will be in the range of 155,000 to 163,000 oz. of gold at an average cash operating cost in the range of $835 to $845 per ounce. Jaguar had been targeting over 200,000 oz. of production from the mines. It blamed mill issues at Paciência for the shortfall but said it expects to reach its targets in the near future.