TSX Venture continues to slide, March 25-28

VANCOUVER — The S&P TSX Venture Composite Index registered a second consecutive weekly decline during the shortened March 25-28 trading period, dropping 7.34 points, or 0.7%, before closing at 1,099 points.

The global economy continues to feel the impact of ongoing uncertainty in the European Union, where Cyprus finally opened doors at its beleaguered banks after a thirteen day hiatus. Socio-political issues also made headlines in Italy, which is still without a government nearly five weeks after its federal elections.

News was a bit brighter in the U.S., where home prices jumped 8.1% in the largest year-on-year increase since early 2006. Manufacturing also demonstrated signs of a sustainable recovery, with orders for long-lead factory items rising 5.7%, marking the biggest gain in the past five months.

On the flipside the U.S. economy expanded by just 0.4% in the fourth quarter of 2012, and the Labour Department reported that the four-week moving average for first-time jobless claims rose above the 350,000 level for the first time since mid-February.

Gold futures continued to fluctuate during the week, with June contracts for bullion dropping US$10.40 en route to a US$1,597.15 per oz. close. Copper futures also had a rough week, as May contracts for the red metal lost US6.9¢ before closing at US$3.40 per lb. Meanwhile the energy sector fared better, with May contracts for crude oil jumping 3.5% or US$3.26 en route to a US$97.20 per barrel weekly close.

Shares of Yukon-focused gold explorer Atac Resources continued to roll this week, jumping 17¢ en route to a $1.54 close. Atac gained momentum following news that producer Agnico-Eagle Mines was investing $13 million in the company via a non-brokered private placement totalling 9.6 million units at a price of $1.35.

Agnico-Eagle will be monitoring Atac’s progress at its wholly-owned Rackla gold project 55 km northeast of Keno City. The 1,600-sq.km property package currently hosts a promising oxide resource totalling 2.5 million measured-and-indicated tonnes grading 4.25 grams gold per tonne for 337,500 contained oz. Following the transaction, Atac will boast a cash position of $27 million, which should position the company well to continue an aggressive exploration campaign at Rackla.

Vancouver-based silver producer SilverCrest Mines had a rough week, leading the Venture in the value-lost category after its shares dropped 24¢ en route to a $2.35 close. SilverCrest lost ground late in the trading period after the company filed an updated technical report for its La Joya silver-gold-copper project 75 km southeast of Durango City, Mexico.

SilverCrest’s update included a new resource estimate, as well as preliminary metallurgical results and a report on the potential for a copper-silver-gold concentrate with over 30% contained copper. La Joya now holds 127 million inferred tonnes grading 23.5 grams silver, 0.18 gram gold, and 0.19% copper for 198.6 million contained silver equivalent oz.

U.K.-based explorer Samco Gold failed to impress markets with its yearly update. The company’s shares dropping 17¢ or 40% during the week before closing at 25¢ following the release of its 2012 results on March 25.

Though Samco finished the year with a healthy liquidity position, including US$10.7 million in cash, the company’s asset base is located in Argentina, which has recently been viewed as a higher-risk jurisdiction for mineral explorers. Samco intends to focus on a mineable resource at its El Dorado Monserrat project in 2013 — located adjacent to AngloGold Ashanti’s Cerro Vanguardia gold mine — as well as outline a maiden resource at its Corina project on the northern boundary of Extorre Gold Mines’ Cerro Moro property.


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