TSX Venture jumps from Oct. 15-19

VANCOUVER — The S&P TSX Venture Composite Index gained 22.8 points or 1.8% during the Oct. 15-19 trading period before closing out the week at 1,315.62 points. Promising news out of the U.S. and China early in the week drove gains, while subsequent earnings disappointments from some major American companies and the Canadian Radio-television and Telecommunications Commission (CRTC) decision to nix the Bell-Astral media deal curtailed market momentum later in the week.

The Canadian dollar fell to its lowest point in eight weeks at US100.68¢ as energy and metals markets struggled. Copper was hit particularly hard, falling 11¢ to $3.64 per lbs., while December contracts for gold bullion fell US$22.10 to US$1,737.61 per oz. Oil also took a step back, with November crude contracts on the New York Mercantile Exchange dropping US$2.05 to US$90.05 per barrel.

Canadian inflation was broadly in line with expectations at an annualized rate of 1.2% in September. China’s growth also tracked closely with projections, expanding 7.4% for 2.2% growth quarter-on-quarter.

Toronto-based explorer Galway Resources jumped 93¢ or 76% on the week before closing at $2.15 per share. The activity followed news of a cash take-over offer from AUX Acquisitions and its wholly-owned Ontario subsidiary.

Under terms of the agreement Galway’s shareholders will receive $2.05 in cash, 0.9 of a share in a spin-out company that will hold Galway’s Vetas gold project, and a share in an additional spin-out company that will hold the Victorio tungsten-molybdenum project.

The price marks a 47% premium over Galway’s 20-day, volume-weighted average share price of $1.39 ending Oct. 18. The company’s shareholders will maintain a 90% stake in the Vetas spin-out and a 100% stake in the Victorio spin-out.

The take-over bid followed news on Oct. 9 of three new high-grade discoveries at Galway’s Vetas property in Colombia. The company was testing six surface anomalies and results were highlighted by 4.2 metres averaging 26 grams per tonne gold in hole 61, and 6 metres carrying 34 grams gold and 572 grams silver in hole 49.

Barkerville Gold Mines is back in the news after the company was slapped with a cease trade order by the British Columbia Securities Commission (BCSC) on Aug. 14. Barkerville was barred from trading after filing a suspect technical report on its Cow Mountain gold deposit in central B.C. The company is in the process of a technical review on Cow Mountain aimed at addressing the BCSC’s disclosure concerns. As part of the review Barkerville has completed an additional 14 surface diamond holes, including 9 twin holes totalling roughly 2,800 metres.

The company also provided an update on its QR Mine and Mill site southeast of Quesnel, B.C. Gold mining operations have reportedly begun at the site with stripping, blasting and drilling underway at the West zone. Barkerville is also working to raise its storage facility dams in order to meet permitting requirements.

B.C.-focused gold outfit Bralorne Gold Mines fell 22% or 18¢ en route to a 64¢ weekly close. On Oct. 17 the company released a preliminary economic assessment (PEA) on its Bralorne gold mine located near Gold Bridge. The base case included an active 85-tonnes-per-day operation with a four-year mine life, and resulted in a net present value of $6.4 million using a US$1,650 gold price and 5% discount rate.

Bralorne attempted to publish a hypothetical assessment on a 250-tonnes-per-day operational expansion but was rebuffed by the Investment Industry Regulatory Organization of Canada (IIROC), which said that portion of the analysis was “not based on current resource estimates as required by disclosure regulations.” IIROC ordered the company to retract all results from that portion of its PEA. Bralorne subsequently labelled the study a “sensitivity analysis” to determine if sufficient resources could be defined.