TSX rides higher for Aug. 3-6 period

The holiday shortened Aug. 3-6 period saw the TSX Composite Index rise 18 points to 11,799.97. The Index was helped along by stronger metal and oil prices as crude marched to above the US$81 a barrel mark.

The Index also benefited from expectations south of the border that the Fed will keep interest rates near zero for an extended period.

A weaker US dollar helped to bolster the gold price by US$20 to US$1,207.15. That upward move took the Global Gold index up 20 points as it finished at 362 points.

The base metals also joined in the upward momentum as the prices of copper, aluminum, nickel, tin, lead and zinc were all higher bringing the Capped Metals & Mining Index up 15 points to 960.28

The big news of the period came when Kinross Gold said it was looking to acquire Red Back Mining in a US$7.1 billion friendly merger. The offer values Red Back shares $30.50 each – a 21% premium. If completed, the move would make Kinross a big player in Africa as Red Back has operations in Ghana and Mauritania. The transaction would leave Kinross shareholders with 63% of the combined company while Red Back’s would have 37%. The merged company would have ten mines and four development projects in eight countries. Red Back shares were up $2.65 for the period to $28.67 while Kinross shares fell 65¢ to $16.22.

Mawson Resources bought the high grade Alto Quemado gold and copper project in Peru and saw its shares jump 23% to 74¢ as a result. Alto Quemado is in the mineral-rich Southern Peru mineral belt. The project became a point of interest after artisanal miners exposed a network of high-grade gold structures between 2001 and 2007. The deal will see Mawson acquire a 93% stake in the property and it says it is negotiating with a separate party for the final 7%.

Second quarter results were a boon to Breakwater Resources share price as the base metal producer rose 22% for the period to $3.57. The company reported net earnings of $24.6 million for the quarter compared with a net loss of $4.5 million for the same period last year. The better earnings came on the back of higher metal price, more concentrate sold and a stronger Canadian dollar.

Drill results from its 2010 program were strong enough to give Detour Gold a lift of $3.82 to finish the period at $27.78. The company announced results from its Detour Lake gold project in northern Ontario. The program drilled 90,000 metres and is over 90% complete. Highlight intercepts included 4.04 grams gold over 51 metres, 4.59 grams over 39 metres, and 3.38 grams gold over 38.1 metres. Detour says it will update mineral resources and reserves by year-end.