TSX Venture trades relatively flat, Oct. 20-24

VANCOUVER — The S&P TSX Venture Composite was unable to turn early-week momentum into sustained gains during the Oct. 20-24 trading sessions, as it lost 4.68 points en route to a 805.45 point weekly close, despite two promising days in the green to start the period. Commodity futures continue to struggle, with China’s gross domestic product (GDP) growth slowing to 7.3% in the third quarter. Meanwhile, Canadian retail sales unexpectedly fell in August, dropping for a second month to $42 billion.

Gold futures traded flat this week following a rebound in the previous trading period, with December contracts for bullion dropping US$3.20 before closing at US$1,231.80 per oz. Crude oil futures continue to flounder, as December contracts for West Texas Intermediate (WTI) lost 2%, or US$1.66, en route to a $81.01 per barrel close. December contracts for copper lost US3.1¢ before closing at US$3.04.

U.K.-based Euromax Resources jumped 37% before closing at 41¢ per share after announcing a streaming deal with Royal Gold on its Ilovitza copper-gold project in Macedonia. The US$175 million agreement will see Royal Gold acquire 25% of gold produced from the project until 525,000 oz. have been delivered, and 12.5% thereafter for life of mine.

Euromax will receive the capital in three tranches, including: US$7.5 million within 90-days of signing; US$7.5 million on the first anniversary of the agreement; and a final US$160 million ear-marked towards project development costs. The company said the first two tranches will be used for permitting activities and the completion of a feasibility study. As a condition of the agreement Euromax must raise $5 million in equity to receive its initial payment.

Junior Gold Reserve received big news from the World Bank’s International Center for the Settlement of Investment Disputes (ICSID) this week when it was awarded US$740 million in accordance with the provisions of the Canada-Venezuela Bilateral Investment Treaty. The company lost 20¢ during the trading period before closing at $3.95 per share.

The award includes: $713 million for the fair market value of Gold Reserve’s Brisas project; $22.3 million for interest incurred since April 2008; and $5 million for reimbursement of legal and technical costs expended by the company.

Gold Reserve had delineated proven and probable reserves of 10.2 million oz. gold and 1.4 billion lb. copper at Brisas, in 485 million tonnes grading 0.67 gram gold and 0.13% copper. The government of Venezuela revoked its construction permit and seized the project in May 2008.

In mergers-and-acquisitions news Fortress Minerals announced an agreement with producer Kinross Gold to pick up a 100% interest in the Fruta del Norte gold project in Ecuador for US$240 million. The company jumped 25¢ during the trading period before closing at $4.75 per share.

Fortress will subsequently undergo a re-branding to Lundin Gold, and be the “principal gold vehicle of the companies controlled by the Lundin family.” The company also announced a private placement to raise roughly $250 million to fund the acquisition. Fruta del Norte hosts 23.5 million indicated tonnes grading 9.59 grams gold per tonne for 7.26 million contained oz. Inferred resources tack on 14.5 million tonnes averaging 5.46 grams gold.