TSX slumps during Sept. 17-21 week

The S&P/TSX Composite Index was down 115.8 points during the Sept.17-21 trading week, as the enthusiasm waned over the recently announced stimulus packages from central banks in the U.S., Europe and China. The index ended at 12,383.60.

During the period, the spot price of gold advanced US$2.50 per oz. to close at US$1,773, while the S&P/TSX Global Gold Index edged up 6.8 points to 353.14. However, the diversified miners weren’t able to gain ground, as the S&P/TSX Capped Diversified Metals & Mining Index lost 81.3 points to 915.9. 

Ivanhoe Australia welcomed a healthy boost to its shares after publishing an updated resource estimate for the Kulthor gold-copper deposit in northwestern Queensland. The deposit now contains 60% more metal in measured and indicated, with 7.4 million tonnes grading 1.6% copper and 1 gram gold per tonne. It has another 5.4 million tonnes at 1.3% copper and 0.9 gram gold in inferred. Kulthor’s upgraded resource could potentially add one or two years of mill feed to the company’s nearby Osborne operation. Ivanhoe Australia gained 51% to end at 74¢.

The week was not so good for Eco Oro Minerals. The Vancouver-based miner led the period’s biggest losers, tumbling 41% to 28¢. The firm, which has its flagship Angostura gold-silver project in northeastern Colombia, announced on Sept. 20 that it will immediately suspend exploration activities and lay off an unspecified number of workers to preserve cash as it waits for the country’s authorities to provide more details on the boundaries of the proposed regional park and paramo in relation to its project.

The Colombian authorities recently said it will extend the exploration phase for the company’s main mining title for Angostura, but forbade Eco Oro from conducting any exploration on areas that fall within the paramo. However, the company argues it doesn’t believe its deposit lies within the protected ecosystem.

“We think the move by the company is prudent given that clarity on paramo boundaries has been slow coming,” say analysts at BMO Capital Markets.

The junior is focused on resolving the permitting issue and aims to complete a prefeasibility study for the Angostura underground project by year-end.

CGA Mining and B2Gold were the week’s most traded stocks, following B2Gold’s friendly US$1.1-billion all-stock bid for CGA, an Australian firm that operates the Masbate gold mine in the Philippines.

CGA shareholders will receive 0.74 of a B2Gold share for each share held. That works out to be $3.18 per share, representing a 22% premium over CGA’s 20-day, volume-weighted average price.

Over the week, CGA advanced 43¢ per share to $3.09 as 80.4 million shares changed hands, while Vancouver-based B2Gold added 10¢ to end at $4.23 on 56.3 million shares traded.