While the TSX Composite Index’s motion for the Jan. 23-27 period was relatively sideways (it managed to carve out a modest 33 point gain to 12,466.50 points) the fact that it didn’t gather downward moment in the face of some less than inspiring news should be taken as a positive.
The bad news came from both the U.S. and Europe in the form of disappointing earnings numbers south of the border, a worse than expected commerce department report on U.S. growth and worries that negotiations between the Greek government and its creditors were breaking down.
With its resource heavy weighting, however, the TSX managed to push through negative headwinds, in part thanks to a stronger gold price. Word earlier in the period from the Fed that interest rates would stay at historic lows until 2014 had investors selling the greenback and buying the yellow metal which was up US$67 to US$1,732.20 sending the Global Gold Index up 26 points to 392.65 points
The prices for aluminum, nickel, tin, lead and zinc were all higher as well and copper prices made a significant gain reaching US$3.90 per lb. Despite those strong prices the Capped Metals & Mining Index was relatively flat for the period at 1,219.16 points.
Pan American Silver is looking to build itself into the world’s largest primary silver producer via the M & A route. The company tabled a friendly offer for Minefinders which sent Minefinders shares up 25% to $14.41. Unfortunately for Pan American its market cap fell on the news as its shares were off $1.92 to $23.10. The key motivation behind the deal is to acquire Minefinders’ Dolores mine in Mexico. Thanks to significant gold credits the mine has negative silver cash costs, and the cash flows from the mine will help Pan American in its drive to build the large scale Navidad silver mine in Argentina. The cash and share offer values Minefinders shares at $15.60 per share.
A move by Moneta Porcupine Mines to adopt a shareholder rights plan put the thought of takeover premiums into the minds of investors as the company’s shares rose 52% after the announcement to finish the period at 29¢. The company said that with the release of its gold resource in December and its low share price the measures were necessary to ward of opportunistic bids. Moneta’s Golden Highway project has indicated resources of 33.5 million tonnes grading 1.0 grams gold for 1.07 million oz. of gold and inferred resources of 47.8 million tonnes grading 1.35 grams gold for 2.07 million oz. of gold.
And Polaris Minerals announced it had closed a debt financing deal that will raise $15 million so that it can repay all existing debt. The company said it was essential to refinance so that it could repay a bridge loan maturing at the end of February and meet the repayment terms of its outstanding debt. The company’s shares were up 46% to 63¢ for the period.
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