TSX slips, Feb. 21-24

The S&P/TSX Composite Index lost ground, retreating 1.9% to 15,533.47, during the holiday-shortened trading week. The S&P/TSX Global Mining Index tumbled 5.2% to 67.69, while the S&P/TSX Global Gold Index lost 3.3% to finish at 216.50. Gold climbed 1.8%, or US$22.30, to US$1,256.90 per oz. The April crude oil contract on the New York Mercantile Exchange lost a penny to settle at US$53.99 per barrel.

SouthGobi Resources was the top percentage winner, gaining 33% to close at 47¢ per share. On Feb. 20, the company reported Mongolia’s Prime Minister J. Erdenebat and government officials visited SouthGobi’s Ovoot Tolgoi coal mine.

SouthGobi intends to commission a wet processing plant in the second quarter of 2017, which would create more jobs and improve the quality of its exported coal. The company also requested some government assistance given the recent slowdown in the coal market.

Three days later, SouthGobi said its subsidiary SouthGobi Sands received the “best social responsibility enterprise of 2016” award. SouthGobi states it has contributed more than $8 billion in Mongolian tugrik ($4.2 billion) towards the development of local communities and the country in the past ten years.

Harte Gold shares rose 13.5% to 42¢ on the back of exploration results. On Feb. 22, the company reported “excellent” results from expansion step-out drilling on 100 metre spacing at the Middle zone, which sits between the Sugar zone deposit and the Wolf zone. Highlight hole 52 returned 37.95 grams gold per tonne over 3.5 metres, including a 0.6-metre interval of 204 grams gold. Hole 52 is the most northerly and the highest-grade hole drilled to date.

Harte has completed 11 holes in the Middle zone, starting from 200 metres below surface. That zone continues to grow through drilling and now measures 400 metres by 400 metres and is open on strike and at depth.

The company’s exploration goals include expanding the area of known gold mineralization and testing the depth potential at the Sugar, Middle and Wolf zones.

On Feb. 27, the company strengthened its management team by adding three new members to advance the Sugar zone project development and exploration programs for 2017. The new members are Stephen Ball, general manager, Sugar Zone mine; John Kita, chief mine geologist; and Allan Armitage, chief exploration geologist.

Northern Dynasty Minerals shares dropped 29% to finish the week at $2.10, despite increasing after it disclosed on Feb. 22 that the U.S. Congressional Committee has recommended that the EPA administrator withdraw its 2014 veto on the Pebble copper-gold project in Alaska.

The stock has more than halved following a Feb. 13 report by Kerrisdale Capital Management, claiming Northern Dynasty’s Pebble project is “worthless” and “uneconomic.” The company argues those claims are “unfounded” and “contain numerous errors.”


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