TSX Venture bounces back, May 20-23

The S&P/TSX Venture Composite Index recovered from a four-month low during the shortened trading period, gaining 1.2%, or 11.40 points, en route to a 987.95-point weekly close. Markets were bolstered by strong quarterly earnings from the Canadian banking sector, as well as rising energy and base-metal futures. Optimism was fuelled by promising manufacturing data out of China and the U.S.

Gold futures had a mixed week, with August contracts for bullion hitting US$1,295.20 per oz. before closing down US$1.50 at US$1,291.90 per oz. Crude oil notched its second straight week of gains, as July contracts for West Texas Intermediate rose 2.2%, or US$2.33, en route to a US$104.35-per-barrel close. Copper also benefitted from global economic news, with July contracts for the red metal gaining US2¢ before closing at US$3.166 per lb.

Lincoln Mining led the percentage-gained category during the week, as it completed a 1-for-10 share consolidation that will reduce its shares outstanding to just 15.8 million. The company jumped 400% — or 12¢ during the week — on 158,000 shares traded, en route to a 15¢ close.

In early May Lincoln announced it had secured a $1-million loan from shareholder Ronald Netolitzky, who held 46 million pre-consolidated shares in the company. Lincoln announced on May 7 that it would proceed with permitting studies on potential open-pit, heap-leach operations at its Pine Grove and Bell Mountain gold deposits in Nevada.

Calgary-based junior Mill City Gold lost 11¢ per share, or 47% of its market capitalization, after releasing its management discussion and analysis (MD&A) on May 21. The company closed at 13¢ per share on 155,000 shares traded.

Mill City revealed on May 13 that it was ending negotiations with the Indonesian government to buy a 75% interest in the North East Tanjung block on-shore oil and gas concession. The project vendor reportedly couldn’t raise enough funds for a reverse takeover.

Mill City reported a working capital deficit of $416,100 in its MD&A, though the company is “encouraged by the quality of precious-metal projects that are available at a small fraction of the capital previously invested in their development by other companies.”

Former explorer Terra Firma Resources led the volumes traded during the week after announcing it would hop on board the medical marijuana trend. The company traded 8.01 million shares after signing a non-disclosure agreement, and is reportedly looking at a “seed-to-sale” business in B.C. Terra Firma had been advancing an option agreement on the American Boy Claim Group, which featured a trio of polymetallic prospects.

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