Investors remained cautious about the outlook for negotiations to avoid the “fiscal cliff” in the United States, but a strong earnings season for Canadian banks helped lift the S&P/TSX Composite Index 26.12 points or 0.21% to finish the final trading week of November at 12,239.36. The S&P/TSX Capped Diversified Metals & Mining Index was also in positive territory, rising to 944.82, up 13.43 points or 1.44%. The spot price of gold fell US$36.70 to US$1,715.20 per oz., while the S&P/TSX Global Gold Index dropped 8.89 points or 2.79% to 309.93.
Shares of Inmet Mining advanced $13.80 or 25.5% to $67.75 apiece as the company fended off an unsolicited takeover bid from First Quantum Minerals and adopted a shareholder rights plan. Inmet rejected First Quantum’s $70-per-share offer, which represented a 33% premium to Inmet’s Nov.27 close and roughly a 28% premium to the 20-day volume weighted average share price.
Black Iron posted the largest percentage gain of the week, climbing 48% to 37¢ on the back of a positive bankable feasibility study of its massive iron ore project in the Ukraine. The Shymanivske open-pit project, 330 km southeast of Kiev in the heart of the Krivbass iron ore mining district, is expected to produce 9.2 million tonnes per year of high-grade, 68% iron ore concentrate at US$43.97 per tonne free-on-board. The project will yield a post-tax internal rate of return of 40.3% and a post-tax net present value of US$3 billion.
Teck Resources jumped 99¢ to $33.63 per share after UBS Securities named the company one of its six favourite Canadian stocks. UBS analyst Brian MacArthur predicts the company will outperform its peers due to its production growth and strong cash position. On Nov. 13, Teck raised the dividend it will pay shareholders in January by 12.5%.
The discovery of a new high-grade area outside the resource shell in the main Ixtaca Zone lifted Almaden Minerals 27¢ to $2.78 per share. Drill highlights include 134.20 metres of 3.76 grams gold per tonne and 18.1 grams silver and 117 metres grading 2.50 grams gold and 30.7 grams silver. The Ixtaca Zone is an epithermal gold-silver target in the southwest portion of the company’s 100% owned Tuligtic project in Mexico’s Puebla State.
On the negative side of the ledger, Richmont Mines fell 98¢ to $2.82 per share. The company announced that it is closing its Francoeur mine and suspending exploration at its Wasamac gold property. Both assets are near Rouyn-Noranda in Quebec. Equipment will be redeployed to Richmont’s Island Gold and Beaufor mines, where equipment purchases had been budgeted for 2013. The decision to close Francoeur was based on high operating costs along with low realized grades, difficult mining conditions and a tight labour pool. At Wasamac, the company concluded after months of project optimization studies that “alternative scenarios” did not offer a “meaningful economic improvement in the current gold price environment” over the initial preliminary economic assessment” released in March. Richmont has lowered its production forecast for 2013 to 65,000-70,000 oz. gold, down from 85,000-95,000 oz. gold.
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