TSX makes marginal gains over Sept. 7-10

While rising interest rates are generally bearish for the market, the Bank of Canada’s latest quarter point rise didn’t surprise everyone. Bay Street had been split on whether the Bank of Canada would hold or raise rates, and so the news did not shock the market as the TSX Composite Index climbed marginally higher over Holiday shortened Sept. 7-10 period. The Index was up roughly 24 points for the period finishing at 12,125.60.

With the Fed south of the border confirming that economic conditions continue to improve and jobless claims dropping, the outlook on the U.S. economy and global growth overall grew rosier. The more optimistic outlook was part of the reason for the continued interest in diversified miners as evidenced by the Capped Metals & Mining Index climbing 22 points to 1,045.06. The prices for nickel, tin and lead were higher, while copper and aluminum prices were off slightly and zinc prices were flat.

The news wasn’t so good for gold miners as the Global Gold Index was down 10 points to 381.61 with the price of gold falling US$3 to US$1,246.50

Word that Stillwater Mining is looking to acquire Marathon PGM in a friendly deal had Marathon shares up 92% to $3.62. The offer is a combination of shares and cash with Marathon shareholders getting 0.112 shares of Stillwater and $1.775 in cash for each Marathon share. The deal values Marathon PGM at US$118 million of $3.55 a share. Marathon’s flagship project is the Marathon PGM-Cu project in northwestern Ontario. The project has 114.8 million tonnes in the measured and indicated category grading 0.775 grams palladium per tonne, 0.228 grams platinum, 0.083 grams gold and 0.241% copper.

Staying with platinum group metals in Ontario, a resource estimate at its Thunder Bay North project had Magma Metals up 32% to 54¢. The company announced indicated resources of 9.06 million tonnes grading 2.43 grams per tonne platinum equivalent metals for 708,000 platinum equivalent ounces. The company plans to have a scoping study released on the project by the end of the year.

The period was also a strong one for Endeavour Financial, which announced it had entered the ranks of gold producers by way of completing its acquisition of Etruscan Resources. The deal saw Etruscan shareholders get 26¢ and 0.0932 of an Endeavour share for each Etruscan shares. With its growing gold production portfolio – it also owns 43% of Crew Gold – Endeavour will look to change its name to Endeavour Mining at its shareholders meeting later this month.

The resignation of three directors from Goldstone Resources board of directors wasn’t viewed as good news by the market, which sent the company’s share price down 16% to 47¢ for the period. The company has its key assets in the Beardmore-Geraldton camp in Northwestern Ontario. Three days after announcing the resignations, on Sept. 13, the company announced that it had appointed two new directors to its board.