TSX slips as oil price sinks, March 6-10

The S&P/TSX Composite Index dipped 0.7% to close at 15,506.68, as oil and gold prices declined. The S&P/TSX Global Mining Index dropped 4.7% to 64.46, while the S&P/TSX Global Gold Index lost 1.6% to finish at 201.74. Spot gold fell 2.4% to US$1,205.50 per ounce. The April contract for U.S. crude oil tumbled 9% to US$48.49 per barrel, on the back of rising U.S. inventories.

Azarga Uranium rose nearly 22% to 42¢ per share. On March 7, the junior said that the U.S. Environmental Protection Agency (EPA) issued two draft permits for the Dewey Burdock uranium project in South Dakota.

Those permits are for Azarga’s planned Class III and Class V underground injection control activities. They cover all outstanding EPA permit applications for Dewey Burdock. Azarga, which applied for the permits in late 2008, says the receipt of these draft permits is a major milestone as it moves Dewey Burdock closer to development.

According to EPA, the draft permits will be available for public review and comment until May 19, 2017. EPA will review all public comments before making a final permit decision.

The EPA approval is one of the three major regulatory agency approvals the company needs for the project. Azarga has already received a nuclear regulatory commission licence, and after the final EPA permits, it can resume the formal hearings to complete the state permitting processing.

Michael Wichterle, an analyst at Cantor Fitzgerald, forecasts initial uranium production from Dewey Burdock in 2018. The project boasts a measured and indicated uranium resource of 8.6 million lb. at 0.3%. He has a “buy” and $1.10 price target on the stock.

Moneta Porcupine Mines fell 29% to 16¢ per share. On March 6, the company updated its 40,000-metre drill program on its wholly owned Golden Highway project near Timmins, Ontario.

Moneta says it has three drills contracted to the end of 2017 after the lack of drills in late 2016 delayed the start of the program. So far, Moneta has completed 15 drill holes, or 8,000 metres, within the Destor West and LC zone, including two holes “lost in blocky ground.”

Moneta notes the recent drilling has extended known gold mineralization several kilometres along strike of the existing resource. The deposit hosts 1.1 million oz. in indicated (31.1 million tonnes at 1.09 grams gold) and 3.2 million oz. in inferred (83.3 million tonnes at 1.20 grams gold).

On BNN’s Market Call, economic geologist Brent Cook of the investment newsletter Exploration Insights, said the Golden Highway project is a large, low-grade deposit with “spotty” mineralization, which if mined as a pit would have an “extremely high” stripping ratio. “It may be a leverage play to the gold price,” he said. Cook added that he’s not a Moneta shareholder because he doesn’t believe it’s an economic deposit.


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