TSX Venture drops, June 1-5

The S&P/TSX Venture Composite Index succumbed to falling commodity futures and global macroeconomic uncertainty during the trading period, dropping 2.60 points before closing at 689.85 points.

Markets await a breakthrough in negotiations between Greece and its creditors, though high-level talks again failed to yield an agreement. Meanwhile, energy futures fell after speculation that the Organization of the Petroleum Exporting Countries would not cut its production annual production target, despite depressed crude oil prices.

Gold futures declined for a second straight week, as August contracts for bullion lost 2%, or US$21.70, en route to a US$1,168.10 per oz. close. July contracts for copper declined 1.4%, or US3.6¢, before finishing the trading period at US$2.69 per lb., while July contracts for West Texas Intermediate crude oil closed down 1.9%, or US$1.17, at US$59.13 per barrel.

Research and development outfit Titanium Corp. led the value-added category during the week after releasing details of a proposed financing via the release of a short-form prospectus. The company jumped 40¢ on 532,000 shares traded before finishing at $1.10 per share.

On June 1, Titanium Corp. revealed it had appointed a syndicate of agents to sell units of one share and a three-year purchase warrant. Each unit will be priced at 37¢, while the warrants carry a 46.3¢ strike price. 

Titanium Corp. is pilot-testing technologies to reduce the environmental footprint of tailings and ponds by recovering bitumen, solvents and minerals from tailings streams. The company says proceeds of the financing will fund long-lead engineering, before building a commercially sized titanium dioxide plant in Valleyfield, Que.

West Kirkland Mining was the most traded stock after announcing results of a prefeasibility study on its Hasbrouck gold project near Tonapah, Nev. The company saw nearly 20 million of its shares change hands, but closed flat at 6¢ per share.

The Three Hills mine is expected to operate for two years, followed by six years at the Hasbrouck mine, with life-of-mine production at the twin Hasbrouck deposits expected to total 567,000 oz. gold. Initial capital expenditures to build Three Hills are estimated at US$54 million. Investing US$83 million more in the first two years of production would help build the larger Hasbrouck operation.

The two-stage project has a 26% internal rate of return and an after-tax $75.3-million net present value at a 5% discount rate, using $1,225 per oz. gold and $17.50 per oz. silver.


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