TSX takes a break, June 30-July 4

Trading on the Toronto Stock Exchange was on the downbeat during the Canada Day shortened week, with the S&P/TSX Composite Index losing nearly 69 points to finish at 15,214.96.  The spot price for gold retreated US$7.91 per oz. to US$1,318.99, while the S&P/TSX Global Gold Index slipped almost 2 points to 194.67. The diversified miners fared better, with the S&P/TSX Capped Diversified Metals & Mining Index climbing 58 points to 903.76.

Labrador Iron Mines, which is active in the Labrador Trough, was one of the week’s worst performers, sinking nearly 16% to 8¢. The producer reported that it would not resume mining this year due to weak iron ore prices, which declined to below US$90 per tonne in June. Instead, the firm intends to reduce operating costs and develop its flagship Houston project. The firm estimates it would need $20 million to $25 million to develop Houston and roughly the same amount in working capital. Desjardins Securities notes the chances of Labrador Iron Mines raising that amount are slim, and has lowered its price target to 2¢ from 10¢, and kept a “sell” rating. 

First Quantum Minerals topped the value gainers’ list on no recent news. The Vancouver-based firm, which reported the week before that it had temporarily halted construction at its Cobre Panama copper project in Panama due to an illegal work stoppage, jumped $2.52 per share to $25.04.

On July 7, TD Securities hiked its price target on the firm to $30 from $27 and reiterated a “buy” rating. First Quantum expects its $470-million acquisition of Lumina Copper to close before September.

Diversified miner Teck Resources advanced $1.85 per share to $25.72, helped by Desjardins initiating coverage on the firm with a “buy” rating and a one-year target of $28.50. Desjardins notes that the firm, which mainly produces copper, zinc and coal, hosts a strong pipeline of growth projects and estimates a 16% return for investors over the next year.

Russell Metals, which is one of the largest metals distribution and processing firms in North America, added $1.50 to end at $35.51 on no major news. However, Raymond James increased its price target to $38 from $34 and had an “outperform” rating on the stock.

Toronto-based Carpathian Gold was the most actively traded stock, with 17.2 million shares changing hands. Carpathian has extended its forbearance and amendment agreement with Macquarie Bank. Under the agreement, Macquarie will increase the funds available under Tranche 3 by US$5 million, for a total facility of up to US$170 million, of which Carpathian has drawn down US$164.9 million for its Riacho dos Machados gold project in Brazil. The forbearance expires on July 31, 2014, with a Tranche 3 repayment due by year-end.

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