The TSX Composite Index continued on its recent upward trajectory as it gained 68 points for the Jan. 21-25 period. The positive run has been tied to strong corporate earnings south of the border, recovering economic growth figures from China and a further kicking down the road of the debt crisis in the U.S. Put it all together and investors were feeling that the global economic recovery is finally starting to gather some steam.
The more bullish opinion on the economy as a whole was not, however, good news for gold bugs. The price of gold fell US$30 to US$1,656.60 per oz. and the Global Gold Index was off 15 points to 280.81 points
The price of copper was also off, if only slightly, as it fell 3 cents to US$3.65 per lb. for the period and the Capped Metals & Mining Index was relatively flat, shedding just 7 points to finish at 1,026.15 points.
It was a tough period for Toronto-based Iamgold, as the company saw its share price sink by 22% to $8.45. The swoon came as analysts downgraded the stock after the company said cash costs will rise between 22% and 33% over last year's numbers. Iamgold expects cash costs to be in the US$850 to US$925 range with production of 875,000 to 950,000 oz. of gold. The rising costs are connected to industry inflation, lower grades and production, and political risk in West Africa. Iamgold said it was cutting back on its exploration in Mali due to the conflict there. Roughly half of Iamgold's current production comes from Mali or its neighbour Burkina Faso. While both its mines in Mali continue to operate, it said it was reducing exploration activity as a precautionary measure.
Northland Resources was also having a tough go of it as its shares plunged 80% to finish up at just 21 cents. The big drop came after the company said it doesn't have the funds it needs complete the construction of its Tapuli mine. The capital shortfall was caused by higher operating costs and higher capex at its other iron ore projects. In a bid to raise the capital it needs Northland will turn to both debt and equity in an effort to raise US$375 million.
Cline Mining was both the period's biggest gainer and most actively traded. The company saw its shares rise 200% to 18 cents after announcing it has taken on GMP Securities as its exclusive financial advisor. Towards the end of last year, Cline announced it had entered into an agreement with Marret Asset Management in an effort to restructure its debt after a downturn in the coal market led to it not being able to make a $2.5 million bond payment. With GMP on board, Cline will now look for other alternatives to the Marret agreement.
Candente Copper got a boost in anticipation of results from its Canariaco property in Peru. The company has drilled three of four metallurgical holes at Canariaco Norte, and is drill testing strong induced polarization anomalies which it believes could be a pyrite halo of a porphyry deposit. The current drill program calls for 15,000 metres of feasibility drilling at the property.
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