TSX Venture returns to the green, June 2-6

The S&P/TSX Venture Composite Index bounced back during the week, rising 3.46 points, to close at 987.45. Investor sentiment improved after the U.S. Labor Department said the economy created 217,000 jobs in May. Meanwhile, the European Central Bank announced measures aimed at low inflation as it cut rates, imposed negative interest rates on its overnight depositors and offered banks new long-term funds.

Gold futures were on the rise, as August contracts for gold bullion gained US$8.50 before closing out the trading period at US$1,252.50 per oz. July contracts for copper dropped US11¢ before finishing the week at US$3.06 per lb.

Quebec-based Abitibi Royalties led the value-added category during the week after it released an update on court proceedings involving producer Osisko Mining. The company gained 40¢ during weekly trading before closing at $2.47 per share.

On June 6 Abitibi announced the status of proceedings it had filed in the Quebec Superior Court on May 30. The company is seeking to enforce its 30%-ownership rights under a joint-venture arrangement with Osisko on the Malartic CHL property, which sits next to the Canadian Malartic mine.

Abitibi proceeded with its legal action after the agreement between Osisko, Agnico Eagle Mines and Yamana Gold on April 16, wherein Malarctic CHL would have been transferred into the new fifty-fifty partnership operated by Agnico and Yamana.

After the court proceedings Osisko, Agnico and Yamana announced the property would not be transferred and that a proposed 5% net smelter return royalty on the Canadian Malarctic assets does not include Malarctic CHL. Osisko also said it would have Abitibi’s claims sent to arbitration. Abitibi is scheduled to appear in court on June 9.

U.K.-based Euromax Resources saw its shares jump after releasing a prefeasibility study at its Ilovitza gold–copper porphyry project, 20 km east of the city of Strumica in Macedonia. Euromax rose 26¢, or 173%, before closing out the week at 41¢ per share.

The company outlined a 10-million-tonne-per-year operation that would carry a US$501-million development price tag and produce an average 95,000 oz. gold and 16,000 tonnes copper. All-in sustaining costs are estimated at US$334 per oz., with copper assumed as a by-product.

With a US$1,250 per oz. gold price and US$3 per lb. copper price, the operation would carry a US$675-million pre-tax net present value at a 5% discount rate, and 18.6% internal rate of return.

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