Toronto Stock Exchange, July 15-19

The S&P/TSX Composite Index shrugged off any talk of summer doldrums with a 170-point gain to finish the period at 12,685.13 points. The gains in Toronto came as the oil price hit a 15-month high and the Canadian dollar fell. With new data indicating that inflation was in check, the Bank of Canada was able to hold low rates, and south of the border, Ben Bernanke assured markets that the loose monetary policies of the last five years would not end abruptly.

The news was also good for gold miners, and investors were buying again. The S&P/TSX Global Gold Index was up 9 points to 177.67 points, as the price for gold climbed US$9 to US$1,292.90 per oz.

The bad news for the period came out of China, which reported slower growth for the second straight quarter. The news hurt base metals, particularly copper, which was off 2¢ to US$3.14 per lb. The diversified miners, however, showed some resilience, as the S&P/TSX Capped Diversified Metals & Mining Index was up 6 points to 716.96 points.

Colossus Minerals’ stock took it on the nose after the company announced development delays at its Serra Pelada polymetallic mine in Brazil. The company has run into water issues as it digs into the main orebody at the future underground mine, and says that the zone’s development will be halted until it can increase its dewatering capacity. It had been pushing to get the mine into production in this year’s third quarter, but initial production likely won’t come until late in the fourth quarter. The company was unable to say how much the delay would impact the bottom line, but the market thought the worst, as Colossus shares were off 50% to 80¢ for the period.

Declining margins at its silver mine in the Yukon had Alexco Resource considering a mine closure. The company said the drop in silver prices was forcing it to devise a plan to close its wholly owned Bellekeno mine as early as October. The news comes just as the mine is hitting its production stride, as it turned out 955,800 oz. silver during the second quarter — a 52% increase over the first quarter. The mine only went into production in early 2011. Alexco shares were off 10% to $1.12 for the period.

At least Stornoway Diamond received some good news. The company that is looking to build Quebec’s first diamond mine got the thumbs-up from the Canadian government on its environmental assessment — the last major permit it needed to build the Renard diamond project. With the permitting out of the way the company is focusing on building a 97 km all-season road to Renard so that it can complete the mine before year-end. Stornoway shares were up a cent to 53¢ for the period.

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