Despite a historic fall in the gold price, and weakness around commodities as a whole, the S&P/TSX Composite Index clawed its way to a 4-point gain, finishing at 12,065.55.
With fears of a Cyprus gold reserve sell-off, the gold price went into a free fall to start the period but stabilized somewhat in the following days. The yellow metal wound up trading for US$86 less than where it ended the period before, at US$1,395.60 per oz. The selling reverberated through to already beaten-up gold equities, as the S&P/TSX Global Gold Index was off 10 points and broke below the 200 mark for the first time since 2008, finishing at 191.84.
The S&P/TSX Capped Diversified Metals & Mining Index also hit depths that it hadn’t seen in some time, falling under 800 points for the first time since 2009. The index was off 38 points to finish at 754.29 points, as copper fell 19¢ to US$3.15 per lb. on worries that the Chinese economy would keep showing relatively weaker growth.
While gold producers suffered under lower gold prices, Barrick Gold had it worse still. Shortly after learning that its flagship development project in Chile was being halted, it had a shareholder uprising on its hands. Eight large shareholders are protesting an $11.9-million signing bonus to co-chairman John Thornton. The bonus would bring Thornton’s total compensation for 2012 to $17 million — a Canadian record. Barrick’s annual shareholders’ meeting in Toronto is scheduled for April 24. The company’s stock was off $4.29 to $18.65 for the period.
Despite being a producer in Senegal since 2009, Teranga Gold has agreed to amend its stability agreement with the government to increase the royalty rate on production to 5% from 3%. In exchange, the government waived its right to take another 25% stake in any deposits that Teranga may develop and put through the Sabodala mill from its regional exploration permits, or any ground it may acquire in the future.
On a more positive note, Allana Potash submitted a feasibility study on its Dallol project to the Ministry of Mines in Ethiopia, clearing the way for a mining licence to be issued. The company said it is also in the final approval stages on its environmental assessment report, which means all permitting hurdles could be cleared this year.
UEX had some stellar results, as the company bolstered resources at the Shea Creek uranium project in the Athabasca basin. UEX has a 49% stake in the project, which is now the largest undeveloped uranium resource in the basin. The latest study increased indicated resources by 6% — they now stand at 2.1 million tonnes grading 1.48% for 67.7 million lb. uranium oxide (U3O8), while inferred resources went up by 15% to 1.3 million tonnes grading 1.01% for 28.2 million lb. U3O8. Areva Resources Canada is the project operator, and has a 51% stake.
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