TSX posts slim gain, Oct. 27-31

It was not a good week for gold companies on the Toronto Stock Exchange, with the U.S. Federal Reserve confirming that its quantitative easing program would end in October. The gold price fell to US$1,170.60 per oz., while a stronger greenback worked against mining companies despite new stimulus measures in Japan. The S&P/TSX Composite Index squeaked ahead by 69.5 points, or 0.5%, to 14,613.32 points; the S&P/TSX Capped Diversified Metals & Mining Index fell 9.44 points, or 1.4%, to 687.49; and the S&P/TSX Global Gold Index lost 24.83 points, or 15.6%, to 134.62.

Verde Potash surged 43% to 60¢ per share on news that the company could apply for a $26.5-million financing program managed by the Brazilian Development Bank and the Studies and Projects Financing Agency. The company is advancing its Cerrado Verde thermopotash and potassium chloride project. Verde Potash says that the controlled-release, non-chloride, multi-nutrient fertilizer is well-suited for sugarcane production in Brazil, and could increase the efficiency of phosphate sources and reduce pesticide use due to its resistance to disease.

News that Victory Nickel added a fourth crew at its Seven Persons frac sand plant near Medicine Hat, Alta. — helping the company  operate around the clock seven days a week — drove up shares by 28% to 46¢. With the enhanced schedule, the company could produce up to 500,000 tons per year of frac sand. The company had operated the phase-one plant below capacity since signing its first take-or-pay contract in August because it wanted to make sure that demand would warrant adding another operating team. CEO Ken Murdock said “good traction” in the Western Canadian frac sand market convinced management that it was the right time to maximize production. The plant processes and sells sand imported from Wisconsin. In phase two the company plans to build a concentrator in Wisconsin, and push ahead with a larger frac sand plant to process imported and domestic sand in phase three. 

Agnico Eagle Mines dropped $6.25, or 24%, to $26.56 per share. Agnico reported a US$15.1-million net loss in the third quarter, or US7¢ per share, which included a non-cash foreign currency translation loss on deferred tax liabilities of US$11.3 million, and other non-recurring losses of US$4.9 million. Payable gold production reached 349,273 oz., up from 315,828 oz. in the year-earlier quarter, with total cash costs per oz. produced on a by-product basis of US$716 per oz., up from US$591 per oz. in the third quarter of 2013. The higher costs came from lower production at Meadowbank, with the end of mining in the higher-grade Goose Pit; shutdowns at the LaRonde mill to upgrade production and service hoists; and a two-week tie-in shutdown for the Kittila mill expansion.

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