TSX posts small increase, Aug. 18-22

The S&P/TSX Composite Index rose 1.51% to 15,535.55 while the S&P/TSX Capped Metals & Mining Index advanced 0.63% to 890.66. The S&P/TSX Global Gold Index fell 2.76% to 198.41 and the gold spot price fell 1.8% or US$23.70 per oz. to US$1,280.80.

Orocobre shares rose 53¢ to $3.10 as the company provided an update on its 60%-owned Olaroz lithium mine project in Argentina’s Jujuy province. Construction of the US$229 million mine began in November 2012. About 95% of the construction work is now done and anticipated to be completed on budget. Orocobre expects to start commissioning the lithium carbonate plant at the end of August, followed by the purification circuit and the drying and micronizing circuits in the period to mid-October. Full automatic operation is expected to be achieved during October. Gas-fired electricity generation was commissioned in July as scheduled and the company is nearing completion of the evaporation pond lining. Orocobre’s partners on the project are Toyota Tsusho Corp. of Japan and Jujuy Energia y Mineria Sociedad del Estado, a mining investment company owned by the Jujuy provincial government.  

First Quantum completed its acquisition of Lumina Copper and its Taca Taca copper project in a cash and share deal valued at $470 million. Taca Taca is in the Puna region of northwestern Argentina’s Salta province, 120 km east of Escondida, the world’s largest producing copper mine. First Quantum’s shares climbed 45¢ to end the trading week at $24.50.

Shares of Russel Metals advanced 30¢ to $36.78 on the back of strong second-quarter results. One of the largest metals distribution and processing companies in North America (it primarily distributes steel products and conducts its distribution business in metals service centres, energy products and steel distributors), Russel reported earnings of $31 million or 50¢ per share on revenues of $893 million, up from earnings of $20 million or 33¢ per share on revenues of $758 million in the same quarter last year.  Revenues in its metals service centre segment jumped 11% year-on-year to $419 million due to stronger demand and higher steel prices.

Alamos Gold received the final signatures approving the environmental impact assessment (EIA) for its Agi Dagi gold mine project in Turkey. The company is also amending the EIA for its Kirazli gold mine project and expects to submit the revised documents by the end of September. Gold production from Kirazli, the first of its Turkish projects, is expected within 18 months of receiving outstanding forestry and operating permits. Alamos has about US$390 million in cash and no debt, and expects to fund development of its Turkish projects internally. Alamos owns the Mulatos mine and has exploration and development activities in Mexico. Shares of Alamos fell 69¢ to $9.93.

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