TSX climbs, June 27–30

Canadian equities finished in positive territory ahead of the Canada Day long weekend, helped by positive economic data and higher commodity prices. Statistics Canada reported the economy grew 0.1% in April, in line with economists’ expectations, after shrinking in February and March.

The S&P/TSX Composite Index rose 1.2% to 14,064.54, erasing the pain caused the week before by Britain’s unexpected vote to leave the European Union. The S&P/TSX Global Gold Index climbed 3.7% to 252.63, driven by higher gold prices. Spot gold closed July 1 up 2% at US$1,341.90 per oz. gold. The yellow metal, which recently gained momentum, is up 26% from its 2015 close of US$1,061 per oz. gold. The S&P/TSX Global Mining Index and the S&P/TSX Capped Diversified Metals & Mining Index both advanced more than 5% to 62.10 and 584.36. The August contract for crude oil settled July 1 at US$48.99, up 2.8%.

Wellgreen Platinum shares rose nearly 43% to 50¢ after announcing that Electrum Strategic Opportunities and Resource Capital would participate in its previously announced private placement. Electrum, an investment arm of New York-based Electrum Group, will subscribe for 4.36 million shares priced at 30¢ per share, which is over its pro rata entitlement. This will provide $1.3 million in gross proceeds. Private-equity fund Resource Capital will exercise its pro rata right in full and buy up to 594,987 shares at 30¢ per share for gross proceeds of $178,500. Most of the funds will help develop Wellgreen’s namesake platinum group metals and nickel project in the Yukon.

Nautilus Minerals plunged almost 27% to 11¢ per share, after reporting a funding gap at its copper-gold Solwara 1 project in Papua New Guinea. The company requires “significant additional funding” to build and deploy the seafloor production system for the deep-sea mining project. It is looking for an immediate bridge loan to buy time to secure more project funding. Seafloor production and testing at Solwara 1 was set for early 2018, but now it could happen later. Nautilus cautions that if it cannot line up the required funding, it will have to halt the project.

Kinross Gold was the most traded stock, with 50.5 million shares changing hands. The major provided an update on its Bald Mountain and Round Mountain mines in Nevada. It says it can boost Bald Mountain’s current 1.1 million oz. gold reserve and extend the mine life by developing two deposits in the near-term. It has increased the mine’s 2016 exploration budget 50% to US$9 million. At Round Mountain, Kinross continues to benefit from the process solution management heap-leach program, which should produce up to 230,000 equivalent oz. gold over the mine life at low costs. Meanwhile, the expansion scoping study added 2.4 million oz. gold to the pit’s estimated inferred resource. Despite the updates, Kinross fell 32¢ to $6.34 per share.


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