TSX closes in the red, May 25-29

Concerns of a shrinking economy drove Canada’s main stock index down 1.2% to close at 15,014.09. The S&P/TSX Capped Diversified Metals & Mining Index decreased 2.7% to 727.52, and the S&P/TSX Global Mining Index retreated 1.7% to 65.48. The S&P/TSX Global Gold Index dropped 0.6% to 165.42, while spot gold fell 1.3% to US$1,190 per oz.

Canada’s gross domestic product fell at a 0.6% annualized rate in the first quarter, reflecting a decline in business investment due to plunging oil prices. The agency also reduced its fourth-quarter 2014 growth estimate by 0.2% to 2.2%.

Carpathian Gold was the most traded stock, gaining 150% to finish at 3¢ per share on 51.3 million shares traded. On May 27, the junior noted Romanian officials granted a 20-year mining licence on its Rovina Valley project. The licence requires a final review by several government departments and publication in the Official Gazette. Carpathian intends to update Rovina’s 2010 preliminary economic assessment.

Two days later, the junior reported an extended forbearance and amendment agreement with Macquarie Bank for the loan on its Riacho dos Machados gold project in Brazil. Carpathian has another US$7.6 million in funds under Tranche 3 of the project finance facility for a total US$220.7 million, of which it has drawn down US$213 million. The forbearance period ends June 12, 2015.

Dominion Diamond was one of the top value adders, climbing 45¢ to $23.28 per share. The week before, the company said total rough diamond sales from its 100%-owned Ekati mine and 40%-held Diavik mine rose 7% year-over-year to US$187.7 million in the first quarter. Revenue from Ekati climbed 37% to US$127.4 million on 710,000 carats sold, which excluded 100,000 carats generated from the Misery satellite and northeast pipes during pre-commercial production. Revenue from Diavik dropped 27% to US$60.3 million on 544,000 carats sold, as output fell nearly 18% to 604,000 carats, due to lower volume of ore available for processing. Meanwhile, carats at Ekati rose 43% to 804,000, but still missed the company’s guidance, largely because of severe winter conditions. Dominion will release its financials on June 10.

Cardero Resource climbed 25% to 3¢ after announcing that Artha Resources’ shareholders have approved the reverse acquisition of their company by Cardero. The company will sell Artha all of its interests in a 100%-owned Argentine subsidiary — which holds the Organullo and Mina Angela gold deposits — in exchange for Artha shares.

After regulatory approval, Artha will acquire Cardero Argentina shares and Artha will change its name to Centenera Mining, among other things.


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