TSX Venture returns to positive territory, Jan. 19-23

The S&P/TSX Venture Composite bounced back during the trading period, as it gained 1.6%, or 10.87 points, en route to a 678.18-point close. Miners benefitted from higher gold futures prices, while markets welcomed a wave of stimulus measures from central banks. 

The Bank of Canada unexpectedly trimmed interest rates during the week, while the European Central Bank announced a program of quantitative easing that will involve spending US$68 billion a month to buy investment-grade sovereign bonds.

Gold futures hit the highest level in five months after April contracts for bullion jumped 1.3%, or US$16.70, before finishing the week at US$1,293.60 per oz. There doesn’t seem to be a light at the end of the tunnel for crude oil futures, however, as March contracts for West Texas Intermediate dropped another 7.2%, or US$3.54, en route to a US$45.59-per-barrel weekly close. March contracts for copper lost 4.4%, or US11.5¢, before closing at US$2.50 per lb.

Explorer Probe Mines led the value-added category during the week due to an all-share takeover offer from  Goldcorp. The junior gained $1.87 during the trading period on 11.8 million shares traded before closing at $5.23 per share.

On Jan. 19 Goldcorp tabled a friendly deal valuing the company at $526 million. The gold producer held 9.3% of Probe’s shares when the bid was launched and is offering 0.1755 of its share for each outstanding Probe share. Based on Goldcorp’s Jan. 16 close of $28.49, each Probe share is valued at $5, reflecting a 49% premium over its close. Goldcorp estimates it would issue 17 million shares for the acquisition.

Meanwhile, shares of Selwyn Resources topped the value-lost column as the junior grapples with fallout from the collapse of a deal to sell its ScoZinc assets in Nova Scotia to Scotian Zinc Mines for $17.5 million. Selwyn lost $1.15 during the trading period before closing at $2.04 per share.

ScoZinc’s primary asset is the lead- zinc mine and mill in Gays River, near Halifax. Selwyn bought the mine — which has all the required permits to restart production — for $10 million in 2011. On Jan. 16 the company reported that Scotian Zinc had “failed to fulfill its closing obligations” by the deadline despite two extensions.

Meanwhile, Quebec-focused gold junior Falco Resources received a boost following news that large shareholder Osisko Gold Royalties was considering taking a bigger role in the company. Falco gained 10¢ on 2 million shares traded before closing at 53¢ per share.


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