Venture ends 2011 at under 1,500 points

The S&P TSX Venture Composite Index managed a modest year-end rally of 77.27 points over the holiday-spanning December 21-30 trading period, bringing the index to a year-end close of 1,484.66 points. In comparison, at the end of 2010 the index hit 2,288 points. Year-end trading and book-clearing helped boost volume and balance out quieter days between the holidays to make for an average of 92.3 million shares traded daily.

The trading period saw no breakaway gains, with Olivut Resources taking the highest value gains at 44¢ to end at $1.37.  The diamonds explorer recently tried to raise as much as $3 million through a private placement with a combination of flow-through shares at $1.25 and common shares at $1.10, but in the end raised only $2.2-million. Despite not selling all shares available, the company did get a boost thanks to one of its largest shareholders increasing their position. Pierre Lassonde, chairman and co-founder of Franco-Nevada, bought 800,000 flow-through shares to bring his total holding in Olivut to roughly 6 million shares or 18% of outstanding shares.  

Callinan Royalties was the second-highest value gainer with a 39¢ gain to end at $2.95. Callinan, with its 6.67% net profits interest in Hudbay Minerals’ 777 mine, had $6.5 million in revenue in the quarter ending September 30, and net earnings of $9.6 million thanks to a recovery of deferred income taxes. The company is continuing with a share buyback program in 2012, set to buy as many as 2.5 million shares. In 2011 the company bought roughly 1.6 million shares at an average of $2.67 for cancellation, while the company still has roughly 49 million shares outstanding. Callinan continues to work through a long-standing legal battle with Hudbay over payment amounts from the 777 royalty.

Struggling Roca Mines saw a short burst in its share price, doubling at one point to 10¢ before ending up 2¢ at 7¢. The company lost $23.7 million in the year ending August 31 compared with $14.2 million for the year before, and milled less that 15% of 2010 throughput. Roca’s share price had been steadily eroding from 41¢ since last January but was walloped in October with the news that the company was suspending production at its Max molybdenum mine in British Columbia, only months after restarting operations. The company’s share price hit an all-time low of 3.5¢ on the news and the company has struggled to regain much ground as the molybdenum price continues to hover around US$14 per lb.

Sandstorm Metals and Energy had a burst of activity with over 5 million shares traded on one day and 8.3 million shares over the period. The only news the company released was an amendment to a coal stream agreement with Royal Coal, which defers Sandstorm’s right to buy coal at US$55 per ton until the end of 2012 to give Royal Coal more time to increase production and establish cash flow. Royal Coal also has debt and cash flow guarantees owing to Sandstorm, as well as a 2.7% gross revenue royalty. Sandstorm’s share price closed down a penny at 34¢.