TSX rises then pulls back

The TSX Composite Index managed to finish the Oct. 29 to Nov. 2 period 98 points higher at 12,380 points, despite giving back some of its earlier period gains.

Those initial gains were built on momentum generated south of the border as stock prices moved higher on better-than-expected job growth figures in the U.S.

But renewed optimism for the American economy meant bad news for commodities and the TSX Composite, which is heavily weighted in the sector. Investors interpreted a potentially strengthening American economy as diminishing the need for further rounds of quantitative easing, resulting in a reduction in inflation expectations. Such a line of thought sent prices for oil and gold lower.

The price of gold was down US$37 to US$1,675.20 per oz., which caused gold miners to fall off slightly as evidenced by the Global Gold Index falling 12 points to 324.56, while diversified miners fared slightly better and the Capped Metals & Mining Index was up 58 points to 972.19 points, despite the price for copper falling 3¢ to US$3.48 per lb.

Although gold lost some of its luster in the period, Freegold Ventures managed to shine, thanks to a new resource estimate for its Golden Summit project in Alaska. The estimate caught the market’s attention by outlining 254% more mineralization in the Dolphin zone. The zone now has indicated resources of 62.6 million tonnes grading 0.73 grams gold for 1.5 million oz. and inferred resources of 191.9 million tonnes grading 0.67 grams gold for 4.1 million oz. of gold. The growing large tonnage deposit had the company’s shares up 42% to 98¢.

Legal issues in Egypt conspired to deflate Centamin’s market cap as the company saw its share price fall by 40% to 93¢. The dispute centres on its flagship Sukari operation near the Red Sea in southeastern Egypt. The Egyptian administrative court annulled Centamin’s concession agreement, which was negotiated under toppled leader Hosni Mubarak’s regime. The new government is led by Mohamed Morsi and backed by the Muslim Brotherhood and the country’s courts continue to review contracts and agreements ratified under the previous administration.

A strong third quarter and the looming expiration of a takeover offer were front and centre for Inmet Mining over the period. Investors took a positive view of the news flow as the company was the largest gainer by dollar value, with its shares climbing $5.72 to $56.17. Inmet said third-quarter net income grew 19% to $116.2 million, or $1.68 per share, from $98 million, as both copper production and prices improved. On the acquisition front, Inmet’s hostile bid for Petaquilla Minerals, which runs the Molejon gold mine next to Inmet’s development-stage Cobre Panama mega-copper project in Panama, was set to expire without being accepted by the necessary majority of shareholders.

Niocan shares spiked after announcing it acquired more claims at its Great Whale Iron Property. The company staked 320 additional claims around three of its primary targets at the project in Northern Quebec.