TSX drops slightly, April 4–8

The S&P/TSX Composite Index fell 0.3% to 13,396.73, despite a triple-digit gain on April 8, after a positive jobs report and a surge in oil prices. The S&P/TSX Capped Diversified Metals & Mining Index tumbled 6.2% to 410.39, while the S&P/TSX Global Mining Index added 1% to finish at 50.75. The S&P/TSX Global Gold Index advanced 7.1% to 197.10. Spot gold increased 1.4%, or US$16.50 per oz., to US$1,238.40. The May contract for crude oil jumped 8% to US$39.72 per barrel. The Canadian economy created nearly 41,000 jobs in March, the biggest one-month gain since last October. The unemployment rate fell from 7.3% to 7.1%.

Royal Nickel shares jumped 54% to 30¢ after the firm reported that mining has started at the Beta Hunt nickel-gold mine in Western Australia. The area, dubbed “Hand of Faith” due to its high gold content, returned a historical intersection grading 455.9 grams gold per tonne over 0.8 metre, including 1,000 grams gold over 0.3 metre. Face sampling in the drive verified this intersection at a mining scale returning 84 grams over 3.3 metres. The company notes the compilation of historical drilling shows the mine could have multiple Hand of Faith-style zones. Royal Nickel owns 66% of Salt Lake Mining, the owner of Beta Hunt. It is buying the remaining interest in the company.

Lithium Americas climbed 50% to 78¢ per share on no news. The week before, the junior secured a joint-venture partner to help build its Cauchari-Olaroz lithium brine mine in northwestern Argentina. Mining and chemicals giant Sociedad Quimica y Minera de Chile has agreed to pay US$25 million in exchange for a 50% stake in the firm’s Argentine subsidiary, Minera Exar S.A., which controls Cauchari-Olaroz.

Shares in Excellon Resources rose after the miner closed a $3-million financing on April 5. Under the financing, investor Eric Sprott, currently the chair of Sprott Inc., bought 6.67 million units, consisting of one share and a half warrant, at 45¢ apiece. Most of the proceeds will go towards optimizing the high-grade Platosa silver mine in Mexico.

On April 4, Sprott agreed to buy 10 million Newmarket Gold shares from Luxor Capital Partners and affiliates at $2.25 apiece for $22.5 million. Once the financing closes, Sprott will own 15 million Newmarket shares, or 8.7% of the company. The news pushed Newmarket shares up 34% to $2.92. The junior operates three gold mines in Australia.

On April 7, Goldcorp announced a $2.9 million financing in Probe Metals. The financing is contingent on Probe closing its $22.8-million merger with Adventure Gold. Goldcorp holds 17.7% of Probe. The financing will give the major a 15% interest in the combined company. Goldcorp shares advanced $1.31 to finish at $22.24.


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