TSX climbs but fundamentals still look shaky

A positive turn in Europe’s debt crisis helped to bolster global markets for the June 20-24 period and the TSX Composite Index was no exception. The Index climbed 120 points to finish at 12,908.89 points.

But the new wasn’t all good as falling crude oil prices combined with a warning from the Bank of Canada that certain risks were increasing. The key risks highlighted by the Bank were: European sovereign debt concerns, U.S. fiscal and debt challenges and higher household debt levels in Canada.

Despite the price of gold falling the Global Gold Index managed to gain 4 points to finish at 358.11 points, even though the six month price chart still shows a downward bias. The yellow metal itself was off US$41 and finished the period at US$1,500.90 per oz.

The Capped Metals & Mining also made a modest reversal of its slumping trend as it turned upwards by 67 points to close at 1,312.90 points. The prices for copper, nickel, tin lead and zinc were all higher, while aluminum prices were flat.

Zincore Metals’ shares were the period’s largest gainer by percentage points as they surged 36% to finish at 38¢. The run came after the company released drill results from the Yanque deposit at its Accha zinc project in southern Peru. Highlights included 7.29% zinc equivalent over 56.9 metres, and 15.06% zinc equivalent over 13.6 metres. The company is drilling to determine where to selectively mine in the early years of an open pit mine plan.

Investors were also bullish on Continental Precious Minerals’ shares, as buying pressure caused them to rise 29% to 36¢. The increase came after Continental announced a lease agreement that will further its exploration program in Sweden. The new land will be part of its MMS Viken licence where it is currently pushing ahead on a pre-feasibility study while looking for a joint venture agreement with a major mining company.

A move by a hedge-fund to bring in a new slate of directors to Klondex Mines board coincided with a bump in the company’s share price. Klondex shares were up 23% to $2.87 after announcing the dissident proxy by the fund. Klondex issued a statement urging its investors not to vote for the funds slate. The hedge fund currently controls 8.1% of the company’s shares.

A financing proposal helped to lift Niocan shares by 18% to $1.06 even though the company decided to reject the offer. The company said that Augyva Mining Resources had offered to subscribe to 3.5 million units at a price of $1.15 per unit, so long as it could fill three of the four board seats.

And the release of Orezone Gold’s preliminary economic assessment for its Bomboré Gold Project in Burkina Faso showed that investors were hoping for more. After releasing the study the company’s share price fell 25% to $3.19. The base case financial model in the study yielded an internal rate of return of just 9.9%.


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