VANCOUVER — The S&P TSX Venture Composite Index started off the New Year with a 2.2%, or 26.38 point, gain following four days of trading that culminated in a 1,228.22 point weekly close on Jan. 4.
Markets received a boost on the heels of an agreement between U.S. Democrats and Republicans that should allow the nation's economy to temporarily avoid the so-called "fiscal cliff". Positive employment data in Canada also fueled gains as Statistics Canada reported 40,000 new jobs were added in December — dropping the unemployment rate down to a four-year low of 7.1%.
A stronger U.S. dollar triggered a fall in commodity prices during the week, with February gold contracts closing down US$26.90 at US$1,647.70 per oz. March contracts for copper were also affected, dropping US2¢ before closing at US$3.69 per lbs., while crude oil contracts rebounded slightly to close the week down US14¢ at US$92.78 per barrel on the New York Mercantile Exchange.
Vancouver-based Chesapeake Gold led in the value-added category for the week. The company jumped 62¢ during the period before closing at $9.14 per share on Jan. 4. Chesapeake is finalizing a pre-feasibility study on its wholly-owned Metates gold-silver-zinc project in Durango State, Mexico. The study was originally scheduled to be completed by the end of 2012, but the company delayed the release into January.
Metates is a bulk-tonnage deposit hosting 1.2 billion measured-and-indicated tonnes grading 0.5 gram gold per tonne, 13.7 gram silver per tonne, and 0.16% zinc for 19 million oz. contained gold, 518 million oz. contained silver, and 4.2 billion lbs. contained zinc.
Chesapeake spent the last few weeks of 2012 finalizing feasibility work on its autoclave circuit, waste disposal facility, and water management measures. The company ended the year with US$44 million in cash and marketable securities.
Calgary-based Bacanora Minerals saw its shares drop 9¢ following the release of a preliminary economic assessment on its Cajon borate deposit in Sonora, Mexico. The company closed the week at 30¢ per share.
Bacanora modelled a potential colemanite mine that would produce concentrate at a rate of 231,100 tonnes per year averaging 10.5% B2O3. The operation would carry a US$7.25 million capital expenditure and result in US$113 million net present value and 249% internal rate of return over a 25-year mine life at an 8% discount rate.
The Cajon deposit hosts three main borate zones, including the El Cajon, Bellota and Pozo Nuevo areas. Bacanora is currently building a pilot plant to conduct in-depth metallurgy and improve potential borate content in its colemanite concentrate. The company reports potential buyers of its concentrates have expressed interest pending a final production flow sheet.
Notable in the trade activity column were three companies in the midst of takeover agreements. Cerro Resources led the Venture in volume as the company saw 9.8 million shares trade hands during the week following its acquisition agreement with Primero Mining. Hana Mining also saw high volumes with 8.4 million shares on the move as the company finalizes a takeover by Cupric Canyon Capital. And finally, Orko Silver traded 7.1 million shares during the week as the company completes a friendly takeover with First Majestic Silver.
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