TSX Venture continues decline, Dec. 3-7

VANCOUVER — The S&P TSX Venture Composite Index continued to lose ground during the Dec. 3-7 trading sessions, dropping 2.8% or 34.8 points before closing the week at 1,186.06 points. Uncertainty over U.S. economic policy negotiations and the upcoming “fiscal cliff” offset strong Canadian bank earnings and a rare uptick in employment data.

Statistics Canada reported the economy gained 59,000 jobs in November, dropping the unemployment rate to 7.2%. The U.S. Labor Department also announced stronger than anticipated employment numbers, as the American economy added 149,000 jobs last month, dropping the U.S. unemployment rate to 7.7%.

February contracts for gold briefly trended below the US$1,700 per oz. level during mid-week trading before closing down US$11 at US$1,705.35 per oz. Copper futures enjoyed a stronger week, with March contracts for the red metal closing up 2.4¢ at $3.67 per lbs.

Oil prices took a tumble late in the week on the back of global demand concerns as January crude contracts closed down 33¢ at US$85.93 per barrel on the New York Mercantile Exchange.

Vancouver-based Afferro Mining led the value-added category this week, as the company jumped 23¢ before closing the trading period at $1.23 per share. On Dec. 6, Afferro confirmed media speculation that it was in discussions with a number of parties regarding a strategic investment or possible acquisition.

Afferro holds a number of large-scale, iron-ore exploration permits in Cameroon in Central Africa. The most advanced project is the company’s wholly-owned Nkout property 330km from a deep-water port near the coastal town of Kribi.

Nkout hosts 1.2 billion indicated tonnes grading 32.9% iron, and Afferro’s current preliminary economic assessment offers a $4.6 billion post-tax net present value and 24% internal rate of return at a 10% discount rate. During 2012 the company focused on building direct-shipping ore potential with seven operational drill rigs. Afferro is targeting a pre-feasibility study in 2013.

Montreal-based Maudore Minerals dropped 61¢ during the week before closing at $1.79 per share. On Dec. 5, the company announced a series of transactions, including a new acquisition and a move to secure debt financing.

Maudore announced a non-binding proposal to Eagle Hill Exploration for a business merger between the two companies. Eagle Hill owns 75% of the Windfall Lake gold property on the Abitibi belt in northern Quebec and completed a 25,000 metre drill campaign in April. A second 25,000-metre drill program is scheduled for completion in December. Windfall currently holds 1.7 million indicated tonnes grading 10 grams gold per tonne for 538,000 oz.  Maudore also announced an agreement with Noront Resources to acquire the remaining 25% in Windfall.

A third transaction involved Maudore signing a term sheet for a C$35 million debt financing and receiving commitments for C$3.25 million in bridge financing.

Maudore president and CEO Dr. Howard Carr said the financing is expected to supply the company with  necessary funding to pursue its regional strategy, which involves the development of the Comtois volcanogenic-massive-sulphide gold deposit and eventual production at Windfall.