TSX Venture bounces back, Aug. 24-28

VANCOUVER — The S&P TSX Venture Composite Index rallied amidst a general market recovery during the Aug. 24-28 trading period, as it jumped nearly 3.4%, or 18.15 points, en route to a 555.67 point close.

Gains were underpinned by surging crude oil futures, while intervention by the Chinese government and signals that the U.S. Federal Reserve policymakers may hold off on potential interest rate hikes also boosted positive market sentiments. In other macroeconomic news, the Canadian government reported a budget surplus of $1.1 billion in June and said it expected to finish with a surplus for the full fiscal year.

October contracts for West Texas Intermediate (WTI) crude oil gained 18%, or 6.98 points, before finishing the week at US$45.22 per barrel. Meanwhile, December contracts for gold bullion dropped 2.5%, or US$28.50, en route to a US$1,134 per oz. close, and December contracts for copper closed up 2.7%, or US6.1¢, at US$2.35 per lb.

Rare-earth company Bacanora Minerals led the value-added category during the week after announcing a conditional long-term lithium hydroxide supply agreement with Tesla Motors. The company gained 55¢ on 551,474 share trade volumes before finishing the trading period at $1.95 per share.

Bacanora is advancing its Sonora Lithium project in northern Mexico alongside joint-venture partner Rare Earth Minerals. The companies estimated that the mine and processing facility will have an initial production capacity of approximately 35,000 tonnes of lithium compounds, with the scaling potential of up to 50,000 tonnes per annum.

One of the key milestones will be the confirmation that Sonora will be able to supply lithium hydroxide in accordance with volumes and timeframes to be established by Tesla for its Gigafactory in Nevada.

Junior Malbex Resources topped the volume-traded column following an analysis that revealed a strong working capital position and interest in new projects. The company saw 6.5 million shares change hands though it lost around 2¢ en route to a 2¢ per share close.

On Aug. 27 the company reported a working capital position of US$4.5 million, including cash-on-hand of $5 million. In April, Malbex sold its indirect interest in the Del Carmen project in Argentina to Barrick Gold for US$4.75 million cash and a 0.5% net smelter royalty on any future production.

The company had a pending application for a “property in an emerging gold belt in the western Dominican Republic,” but indicated it was now looking elsewhere following “inexplicable delays” in its application process.

Explorer Kennady Diamonds registered strong gains during weekly trading after announcing bulk sample results from its Kennady North project in the Northwest Territories. The company jumped 38¢ on 394,253 share trade volume before closing the trading period at $3.68 per share.

On Aug. 26 Kennady released recovery results from a 443-tonne bulk sample at the southeast lobe of the Kelvin kimberlite. A total of 35 diamonds larger than one carat were recovered, with the average grade sitting at around two carats per tonne.