TSX Venture stumbles, Oct. 22-26

VANCOUVER — The S&P TSX Venture Composite Index dropped 14.78 points or 1.1% during the Oct. 22-26 trading sessions before closing the week at 1,300.84 points.

Promising third-quarter growth figures from the U.S. were overshadowed by a slew of earnings disappointments amongst major corporations like General Electric and 3M. The Canadian dollar finished down 0.41¢ at US100.2¢, while gold prices dropped US$9.40 per oz. en route to a US$1,711.10 weekly close. Oil prices rose slightly on the back of stronger growth in the U.S., with December crude contracts jumping 23¢ on the New York Mercantile Exchange before closing at US$86.28 per barrel.

Vancouver-based explorer Hana Mining jumped 34¢ per share before closing the week at 79¢ following news of a takeover offer from Cupric Canyon Capital. Hana is exploring its Ghanzi copper-silver project in Botswana. Cupric currently holds 18.6% of Hana’s outstanding shares, and its offer represents an 88% premium that would see Hana shareholders receiving 82¢ in cash for each share.

Hana plummeted to 52-week lows during the third quarter after questions surrounding Ghanzi’s economic viability surfaced. The company released a US$400-million mine plan in May that caught investors off guard due to aggressive metal pricing and higher-than-expected cost estimates.

Ghanzi’s Banana zones hosts 40.9 million indicated tonnes averaging 0.87% copper and 12.5 grams silver for 780 million lbs. contained copper and 16.4 million oz. contained silver.

On Oct. 24, Anfield Nickel announced results from a prefeasibility study (PFS) on its Mayaniquel nickel project in northeastern Guatemala. The company’s shares subsequently leapt 50¢ during the week before closing at $3.80 per share.

Anfield’s PFS bumps average annual production to 36,500 tonnes of nickel over life of mine by adding a second rotary-kiln furnace unit in the mine’s fifth year. The company noted high-grade nickel in its start-up pit that would see plant feed grade clock in at 1.86% nickel over the initial three years of operation.

According to the study, Mayaniquel will cost US$946 million in capital expenditures and carry a net present value (NPV) of US$1.38 billion, at an 8% discount rate, with an internal rate of return (IRR) of 19.9% (compared to a NPV of US$605 million and an IRR of 14.1% in a 2011 preliminary economic assessment).

The company’s base case assumes a long term nickel price of $8.50 per lb., including an 18¢ per lb. contained iron credit. The project hosts total proven and probable reserves of 69.9 million tonnes grading 1.41% nickel.

Toronto-based Kennady Diamonds dropped 37¢ or 23% during the week en route to a $1.23 close. On Oct. 22, the company announced diamond recovery results from its Kennady North project in the North West Territories.

Kennady reported caustic fusion diamond results for samples taken from its Faraday, Faraday South and Kelvin kimberlites. Combined samples weighed in at roughly 394 kilograms and returned 89 macro diamonds and 1,800 micro diamonds. Macro diamond weight averaged 0.76 carats. Based on results the company is planning a 5,000 metre winter drill program at the site scheduled to begin in March 2013. Kennady expects to have sufficient data for a maiden resource following its winter program.

On Oct. 26 Kennary announce a non-brokered private placement for an aggregate raise of US$3 million. The company issued $300,000 in flow-through at $1.45 per share, and $2.7 million in hard stock at a price of $1.15 per share. Proceeds are expected to fund upcoming drilling at Kennady North.