TSX posts solid gains, April 6-10

A slight rally in oil prices and reports of encouraging employment data in Canada helped lift Canada’s benchmark index. The S&P/TSX Composite Index advanced 2.4% to 15,388.43, while the S&P/TSX Capped Diversified Metals & Mining Index jumped 3.7% to 721.92 and the S&P/TSX Global Gold Index rose 2.3% to 165.87. The gold price climbed 0.4% to finish at US$1,207.30 per oz.

Seabridge Gold surged $1.07 to $8.29 per share. The company announced on April 7 that it had closed a $16.4-million bought deal flow-through equity financing. The money will be spent on Seabridge’s 2015 exploration program at its KSM project in northwestern B.C. CEO Rudi Fronk said in prepared remarks that the focus of the program will be discovering and expanding higher-grade core zones that could enhance KSM’s projected economics. Fronk said the company expects the 2015 program “to once again generate additional gold resources, which more than offset the share dilution involved.” Seabridge’s 2014 drill program at Deep Kerr and the Iron Cap Lower Zone, for example, added a combined 5.4 million oz. gold and 4.2 billion lb. copper in a total of 431 million tonnes of inferred resources (grading 0.40 gram gold per tonne and 0.5% copper at a US$20 per tonne NSR cut-off), while shares outstanding increased by just 1.4 million during the year.

In the diamond space, Peregrine Diamonds jumped 40% to 30¢ per share and Dominion Diamond climbed 84¢ to $22.37 per share. Peregrine announced that exercising 21¢-per-share warrants that expired April 6 has provided the company with $11.9 million. Dundee Capital Markets estimates that, along with the $12.7 million on the company’s balance sheet as of December 2014, “Peregrine should be well positioned to move Childiak over the next twelve months” and estimated that the company “should have cash to complete its 2015 program and continue work into 2016 including initial work for a PEA.” Dominion Diamond, meanwhile, reported strong financial results for fiscal 2015, along with a US40¢ per share annual dividend, or a 2.3% yield. Dominion reported that it generated earnings before tax of US$166 million and free cash flow of US$183 million during the fiscal year, and began fiscal 2016 with US$458 million of unrestricted cash on its balance sheet.

Shares of First Majestic Silver fell 43¢ to $6.47 per share. The company announced a bought-deal private placement with BMO Capital Markets of 4.62 million common shares at $6.50 per share for gross proceeds of $30 million. The proceeds will be used for general working capital and to develop a ramp at its La Guitarra silver mine from the Coloso mine to the Nazareno area. First Majestic also plans to advance permitting and planning to develop the Mina de Agua and El Rincon areas at La Guitarra.