Toronto Stock Exchange, Dec. 16-20

The S&P/TSX Composite Index jumped 273.90 points, or 2%, to 13,399.60 during the  trading week after the U.S. Federal Reserve said it would trim its monthly bond-buying program by US$10 billion to US$75 billion, starting in January. The S&P/TSX Capped Diversified Metals & Mining Index advanced 36.88 points, or 5%, to 751.89. However, the proposed stimulus cut didn’t help the gold price. The yellow metal tumbled US$35.20 per oz. to US$1,203.50 per oz. This pushed the S&P/TSX Global Gold Index down 3 points, or 2%, to 151.36.

Brigus Gold was the week’s most traded stock after Mexico-focused Primero Mining tabled a friendly $220-million bid for the junior that operates the Black Fox gold mine near Timmins, Ont.  Brigus’ investors would receive 0.175 of a Primero share for each share held, and a 0.1 share of a new spinout company that would hold Brigus’ Goldfields project in Saskatchewan and the Ixhuatan and Huizopa assets in Mexico. The deal values Brigus’ shares at 91¢, a 45% premium to its Dec. 13 closing price. The transaction should close in February. Brigus jumped 18¢ to 81¢ on 29.3 million shares traded, while Primero lost 60¢ to finish at $4.62.

On Dec. 17, Asanko Gold said it intends to buy PMI Gold by late January, causing heavy trading in shares of PMI. Asanko estimates it could save US$100 million in costs by co-developing its Esasse gold project with PMI’s neighbouring Obotan gold deposit, both in Ghana.

Asanko is offering 0.21 of its share for each PMI share. The proposal values PMI at $183 million, or 44¢ a share. Asanko made a similar move for PMI in 2012, which failed. However, analysts believe this time the business combination should succeed. The combined company would have US$280 million in cash and a US$150-million debt facility. PMI climbed 7¢ to end the week at 34¢, on 25.3 million shares traded.

Agnico Eagle Mines was one of the biggest value losers, dropping 97¢ per share to $26.92. The gold producer announced a $9.3-million investment in Panama-focused junior explorer Pershimco Resources, where it would buy 19.8 million units of the company in a private placement for 47¢ apiece. Each unit consists of a share and a warrant. Each warrant allows the holder to buy a share at 54¢ within two years of the transaction closing.

The deal should wrap up around Jan. 10, 2014, after which Agnico will hold a 9.9% stake in Pershimco. The junior’s existing shareholder Sentient Group has agreed to subscribe to another 4 million units to maintain its 16.9% interest in Pershimco.

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