TSX rises on strong mining stocks, Feb. 29-March 4

A smaller-than-expected Canadian trade deficit in January (exports reached $46 billion and export volumes were up 3.6% month-on-month), stronger-than-expected U.S. jobs data and higher commodity prices (U.S. crude rose nearly 4% to finish at US$35.92 per barrel, while gold increased 3.1% to US$1,259.10 per oz.) drove Canada’s main stock index higher. The S&P/TSX Composite Index jumped 3.2% to 13,212.50 and the S&P/TSX Capped Diversified Metals & Mining Index finished 28.6% higher at 453.79. The S&P/TSX Global Mining Index advanced 11.4% to 51.87 and the S&P/TSX Global Gold Index rose 2.6% to 181.58.

Shares of gold producer Aureus Mining surged 156% to 21¢, with commercial production at its New Liberty gold mine in Liberia effective March 1. The mine has produced 14,000 oz. gold so far this year, with gold recovery levels increasing to 90% in February. Plant throughput last month totalled 90,099 tonnes of ore milled, which recovered 9,000 oz. gold.

Quest Rare Minerals jumped 46% to 10¢ a share. The company announced March 4 that it has been awarded a $5-million grant from Sustainable Development Technology Canada (SDTC) to support a large-scale pilot plant for mixed rare earth element (REE) oxides using its selective thermal sulphation (STS) process. The company’s STS Cleantech pilot project is one of 36 projects selected for funding by SDTC. According to Quest, its STS technology is simpler; requires fewer reagents and lower reagent dosages; separates rare earth elements from major impurities; optimizes liquid process effluent quality and produces smaller quantities of solid residues; and entails lower capital and operating costs. In addition, Quest says the STS process is designed to extract REEs from phosphor powder recovered from fluorescent light bulbs.

Pretium Resources climbed $1.47 to $7.51 per share. The company closed a 28.4-million share offering at US$4.58 per share for gross proceeds of US$130 million. The proceeds will fund development of the Brucejack project in northern B.C. for working capital during start-up, as well as general corporate purposes. Pretium is targeting commercial production at the high-grade project in 2017.

Shares of Lundin Mining rose 57¢ to $4.29 apiece. Lundin has entered into an agreement with an affiliate of Freeport-McMoRan to buy an interest in Freeport’s stake in the Timok project in Serbia. Timok contains the high-grade copper-gold Cukaru Peki deposit. The project partners are Freeport, which is operator, and an affiliate of Reservoir Minerals, which holds a minority stake in the project and has certain transfer rights from the proposed transaction.

Kinross Gold completed a US$250-million bought-deal financing and will use US$175 million of the proceeds to repay credit facilities that allowed it to buy assets from Barrick Gold. The rest will repay debt maturing in 2016 and general corporate purposes. Kinross rose 7¢ to $3.98 apiece.