TSX ends up higher, Aug. 24-28

The Toronto Stock Exchange finished in positive territory as investors took in higher oil prices and news that the Chinese government cut interest rates again to bolster its slowing economy. The S&P/TSX Composite climbed for four consecutive days, following a six-day slide, to close the week up 2.9% at 13,865.07. The S&P/TSX Capped Diversified Metals & Mining Index jumped 4.8% to 457.55, while the S&P/TSX Global Gold Index fell 6.8% to 130.15. The spot gold price dropped 2.3% to finish at US$1,133.80 per oz.

Lithium Americas shares climbed 39% to 32¢, after announcing it signed a heads of agreement with Korea-based Posco defining the conditions for a joint venture entity to develop its Cauchari-Olaroz lithium project in Argentina. The parties expect to form the joint venture in the fourth quarter, after completing due diligence. Under the partnership, Posco would use its proprietary lithium extraction technologies to produce lithium carbonate and lithium hydroxide from Lithium Americas’ Cauchari-Olaroz salar properties. Compared to the traditional brine evaporation, Posco claims its technology produces lithium faster, with a higher recovery rate. The joint project should produce around 2,500 tonnes per year by year-end 2016, before ramping up to 20,000 tonnes a year by the end of 2017. Posco will finance the initial capital required for the first commercial phase of 2,500 tonnes, with the joint venture funding the rest.

Lima-based gold miner Minera IRL had another turbulent week, ending up 28.5% at 9¢ per share. On Aug. 27, shareholders voted against the re-election of chairman Daryl Hodges and a 10-for-1 share consolidation at its annual general meeting. As a result, the miner’s remaining two directors, swiftly appointed Jamie Pinto, who has a legal background, as its new director. The board is seeking a new CEO, after sacking interim CEO Diego Benavides due to “impropriety” allegations on Aug. 24. Earlier this month, the firm suspended its Ollachea gold project in Peru, after the Ollachea community withdrew its support, demanding leadership changes. 

Teck Resources added $1.06 to finish at $9.36 per share, after announcing a new joint venture in Chile that would combine its Relincho copper-molybdenum with Goldcorp’s El Morro gold-copper project into a single project, tentatively named Project Corridor. Teck and Goldcorp will work together to develop the assets, infrastructure and community relations. Preliminary estimates for start-up costs at Corridor are US$3.5 billion, which is nearly half the cost of building both El Morro and Relincho as standalone operations. Annual production at Corridor should average 190,000 tonnes copper and 315,000 oz. gold for the first 10 years of its 32-year life. Goldcorp, which recently agreed to buy the remaining 30% stake in El Morro from New Gold, lost $1.94 to close at $18.47 per share. 


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