TSX feels the chill, July 20-24

Canada’s resource-heavy benchmark index took a beating as prices for gold, copper and oil touched significant lows. Weaker-than-expected economic data from China and the Chinese equities rout added fuel to the slide in commodity stocks, while rising expectations that the U.S. Federal Reserve would raise interest rates punished the gold sector. The S&P/TSX Composite Index slid 3.1% to 14,186.24, while the S&P/TSX Capped Diversified Metals & Mining Index plunged 11.2% to 545.67, and the S&P/TSX Global Gold Index lost 8.8% to 124.63. Gold fell to a low of US$1,077 per oz. on July 24 — a level not seen in the last five and a half years — before finishing at US$1,099.50 per oz., marking a 2.98% decline.  

Falling bullion prices hit gold miners across the industry, but Barrick Gold shares came under particular pressure after Ned Goodman resigned from the company’s board of directors. Goodman, who founded asset management company Dundee Capital, was appointed to Barrick’s board in December 2013. In a brief July 23 press release, Barrick said Goodman resigned “in order to focus on a new business venture in resources and other hard assets.” Barrick shares fell 16.9%, or $1.93 to $11.40 per share, and were the third most traded of the week.

News that Chilean authorities have approved Lundin Mining’s environmental impact assessment for extending operations and mine life at the company’s Candelaria mine failed to compensate for falling base metal prices. Lundin Mining produces copper, nickel, zinc and lead, all of which saw prices plummet. Copper fell 4.1% to US$2.38 per lb., while nickel dropped 1.9% to US$5.10 per lb.; zinc, 5.7% to 88¢ per lb.; and lead, 7.3% to 77¢ per lb. Lundin’s shares fell 42¢, or 8.5%, to $4.53 apiece.

Canarc Resource’s shares surged 30% to 6.5¢ on news of positive results from metallurgical gold-recovery testing from a high-grade gold concentrate sample produced from its New Polaris gold mine project. Oxidation test work on the finely ground New Polaris concentrate indicated 85% gold recoveries could be achieved using the Albion process, which is a “combination of ultrafine grinding and oxidative leaching at atmospheric pressure.” Canarc said Albion testing will enter a second and final phase to optimize the test conditions for improving recoveries and determining economic parameters. The feed to the Albion process are base or precious metal sulphide concentrates that “are oxidized, allowing the desired metals to be recovered by conventional means,” Canarc says, noting that Glencore developed the process in 1994, and that it is patented worldwide. Canarc says there are three operating Albion process plants, two of which are in Spain and Germany, and a third in the Dominican Republic.