Toronto Stock Exchange, July 8-12

The S&P/TSX Composite Index beat back the summer doldrums with a 274-point gain, rising to 12,462.18 for the period. The positive momentum came largely on the back of gains in the commodity sector, as oil and metal prices climbed higher.

Investors’ move into commodities and away from the U.S. dollar came after U.S. Fed Chairman Ben Bernanke said low interest rates wouldn’t go away any time soon. The comments eased the market’s concern over an imminent end to quantitative easing and low rates.

The news, however, wasn’t all good, as Chinese exports fell 3.1% June, missing the 4% increase forecast. Upcoming growth numbers are expected to come in at just 7.5%.

But bad news from the Asian dragon couldn’t dampen gold bugs’ spirits. Traders decided the metal was oversold and bid up the price US$56 to US$1,277.60 per oz. Gold miners were up, too, with the S&P/TSX Global Gold Index rising 3 points to 167.42.

Strong precious metal prices carried over to the base metal sector, as the price for copper was 8¢ higher to US$3.16 per lb. The S&P/TSX Capped Diversified Metals & Mining Index was up 15 points to 710.62.

Mergers and acquisitions heated up, as Alamos Gold made a $69-million bid for Esperanza Resources, which is advancing its namesake gold project in Morelos state, Mexico. The deal would give Esperanza shareholders 85¢ in cash for each common share — a 38% premium on Esperanza’s 30-day volume-weighted average price. Esperanza shareholders would also get 5 million Alamos warrants.

Atna Resources was one of the period’s largest gainers, up 86% to 21¢. The jump in price and volume came on no specific news. In fact, some recent news was hardly positive. In late June the company announced falling gold prices had it trying to cut costs by putting its Pinson mine in Nevada on care and maintenance. Ore stockpiles from the mine are being shipped to a third-party mill to help pay for the shutdown. The company owes Sprott $20 million over the course of next year, and raising the cash may be a challenge. On a more positive note, the company announced on July 2 that it had achieved record production from its Briggs gold mine in California. The plan is to generate more cash for the debt obligation via more production from the mine.

Good news was bolstering Ur-Energy’s share price at press time. The company announced that it got the nod from the U.S. Nuclear Regulatory Commission to transfer  Pathfinder Mines’ Shirley basin licence. The government agency confirmed that Ur-Energy wouldn’t be responsible for the tailings site, which is fully reclaimed and being transferred to the U.S. Department of Energy. The transfer is a major closing condition of the company’s deal with Areva Mining to acquire Pathfinder.

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