TSX lower as gold falls for Jan. 17-21 period

TSX Composite Index fell 169 points to finish the Jan 17-21 period at 13,258.57 as the Bank of Canada held the overnight rate steady at 1%.

In its outlook report the Bank pointed to the impact of a high Canadian dollar on exports and high household debt as the two key risks going forward.

The Global Gold Index continued to slide as it lost 6 points to finish at 371.86. The index has fallen 12% since the beginning of the year when it was in the 420 point range. The price of gold has fallen roughly US$62 in that time and finished the period at US$1,343.50.

The diversified miners have managed to hold value slightly better than their cousins in the gold sector. The Capped Metals & Mining Index was off 79 points to finish at 1457.54. At began the year marginally higher at the 1,499.1 level. For the most recent period only the price of tin was higher, as the prices for copper, aluminum, nickel, zinc and lead all fell.

Word from Iamgold on exploration progress at the Kalana project in Mali, was a boon to Avnel Gold’s share price. The company, which is joint ventured with Iamgold on the project, saw its shares climb 44% to 55¢ after Iamgold said it hit “significant gold mineralization” three kilometers east of the high grade Kalana underground mine.
The company plans to do 34,500 metres of drilling this year as it looks to develop a resource estimate. Iamgold shares were up 9% to $18.69 for the period.

Zazu’s Metals ability to raise $2.25 million through a private placement was seen as good news by the market as the company’s shares climbed 36% to finish up at 72¢. The company is issuing 5 million shares at a price of 45¢ each to raise the money, which it says will go into advancing its LIK deposit in Northern Alaska towards feasibility.

The Government of Papua New Guinea granted the world’s first deep sea mining lease to Nautilus Minerals, and the news helped bolster the company’s shares by 27% as they finished the period at $2.80. The lease is for the Solwara 1 project in the Bismarck Sea and is 50 km north of Nautilus’ Rabaul project, where the company plans to mine high-grade copper and gold deposits 1600 metres below the water line.

More gold production in a high-price environment is generally well received, and Dynacor Gold Mines’ latest released proved to be no exception. The company announced that it had doubled production at custom mill in Peru to 10,478 oz. for the fourth quarter. That increase helped the company to surpass its target of 25,000 oz for the year as the plant turned out 33,525 oz. of gold. That represented at 43% increase over total production from 2009. Dynacor shares were up 23% for the period to $1.77.