TSX dips, Oct. 9-15

The S&P/TSX Composite Index fell 1% during the Thanksgiving holiday-shortened period to finish Oct. 15 at 13,828.97. The S&P/TSX Capped Metals & Mining Index tumbled 3.7% to 469.58, while the S&P/TSX Global Gold Index jumped 7.7% to 145.59. The spot price for gold rose 3%, or US$35 per oz., to close at US$1,179.80.

Carlisle Goldfields soared after Alamos Gold, which owns 19.9% of the junior, offered to buy Carlisle’s remaining shares. The all-share proposition values Carlisle at roughly $128.5 million, or 60¢ apiece. That works out to be a 62% premium to Carlisle’s Oct. 14 close. The junior’s main asset is the Lynn Lake gold project in Manitoba. Alamos currently has an option to increase its existing 25% interest in the project to 60% by spending $20 million in three years, and delivering a feasibility study. The deal, however, allows Alamos to consolidate its ownership in Lynn Lake without the earn-in agreement, while providing Carlisle shareholders exposure to Alamos’ strong production and development portfolio. The transaction is set to close by year-end. Carlisle shares catapulted 147% during the trading period to finish at 63¢.

Trevali Mining continued to climb after reporting strong third-quarter production results from its Santander zinc-lead-silver mine in Peru on Oct. 8. Zinc production came in at 14.6 million lb., up 7% from the second quarter. Santander also produced 7.6 million lb. lead and 282,000 oz. silver, both in line with the previous quarter. The junior has increased Santander’s annual production guidance to 50-52 million lb. zinc, up from 48-50 million lb., while upgrading its lead and silver targets to 29-31 million lb. and 1-1.05 million oz., respectively. Trevali has lowered its 2015 cash costs by roughly 5% to US$46-US$48 per tonne milled. Meanwhile, the company is commissioning its 3,000-tonne-per-day Caribou mine in northern New Brunswick. The zinc-lead-silver mine should reach commercial production in the fourth quarter. The junior advanced 59% to close at 63¢ per share. Raymond James analyst Alex Terentiew has a $1.20 target and “outperform 2” rating on the stock.

Canarc Resource jumped 31% to 9¢ per share. Canarc announced that it hired Mining Plus Engineering to complete a National Instrument 43-101 resource report and preliminary economic assessment (PEA) on the newly acquired El Compas gold-silver project in Zacatecas, Mexico. The PEA results, to be released in January 2016, should help arrange financing to bring El Compas into production that year. Carnarc bought the project through a subsidiary of Marlin Gold Mining.

Harte Gold shares rose 30% to 7¢ after raising $2.3 million for its Sugar Zone property in Ontario. On Oct. 14, Harte reported the final closing of $1.3 million under its non-brokered private placement and another $900,000 under a flow-through financing. Part of the funds is being used to conduct a 70,000 tonne bulk sample project to test mine the Sugar Zone deposit.  


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