Gold up, energy down: that was the theme this week. Along with concerns over base metals. For some reason, the base metal stocks were soft on the back of a pullback in energy. This is a bit odd in that, as energy costs drop, costs of producing a pound of copper drop and demand would generally increase as consumers have more money freed up from savings on energy. But the market went the other way – go figure
The TSX Capped Energy Index recovered slightly from a 12.76% sell-off finishing the week down 9.89%. The TSX Capped Gold Index finished up .58% after weakness early in the week. The TSX Venture Composite, for its part, regained some of the week’s losses finishing down 1.9%.
The sharp sell-off in the general markets appears to have created fear selling that is spilling over into the resource sectors. With gold stocks lagging the gold price there is an opportunity — they usually catch up and lead the price of gold.
The Uranium stocks were erratic this week as they often can be – but by the end of the week issues such as International Uranium, UEX and Laramide Resources had regained their earlier losses.
Dynatec Corp generated interest by reporting that the company has reached a deal to pick up a 27% stake in FNX Mining Co in exchange for Dynatec’s interests in Aurora Platinum Corp and a joint venture in Ontario’s Sudbury Basin.
The Cerro Colorado copper mine, owned by Anglo-Australian miner BHP Billiton, estimates copper production in 2005 will fall at least 19.5% to 90,000-95,000t due to an earthquake in June, the company said in a statement.
The much-anticipated trial between Aquiline and IMA Exploration over ownership of the world-class Navidad silver property in Argentina is scheduled to begin on Tuesday (October 11) in Vancouver and last six weeks. Aquiline Resources Inc rejected a Can$21million settlement offer from IMA this week.
Mundoro Mining closed a bought deal raising (at $C2.95) gross proceeds of C$25.1 million to fund exploration and development of the Maoling gold project in Liaoning province.
Novagold Resources released further results from the 20,000 m 2005 drill program at Galore Creek in Northwestern British Columbia, Canada. Significant results include hole GC05-581 in the Central deposit which intersected three composite intervals totaling 226.5 m grading 2.5% CuEq or 4.1 g/t AuEq. Hole GC05-628 in the Southwest deposit also intersected three composite intervals totaling 183.4 m grading 1.9% CuEq or 3.1 g/t AuEq.
As promised by Bema Gold President Clive Johnson, Bema and Arizona Star have filed notice that they consider Placer Dome to be in default of a shareholder agreement pertaining to the Cerro Casale joint venture in Chile. On September 27, Placer Dome announced that it concluded that the Cerro Casale project in Chile is not financially viable at this time. In a news release issued Tuesday, Bema and Arizona Star said that they questioned the foundation for the issuance of a certificate by Placer Dome that the project is not financable.
Peru Copper has released the results of an updated independent resource estimate for its Toromocho project located in Peru. The measured and indicated resource now stands at 1.834 billion tonnes grading 0.47% Cu, 0.016% Mo and 6.8 g/t Ag, containing 18.9 billion pounds of copper, 677 million pounds of molybdenum and 399 million ounces of silver at a plus 0.27% CuEq cut-off. Contained within that mineral resource is a central core of the deposit totaling 967 million tonnes based on a higher 0.6% CuEq cut-off.
StrataGold has entered into a joint venture agreement with Newmont Overseas Exploration, a subsidiary of United States-based Newmont Mining Corp., in respect to StrataGold’s Barama reconnaissance permit (BRP) in Guyana.
Fronteer Development Group completed its first deep drill hole beneath the historic Michelin deposit in Labrador, Canada and intersected 2.64 lb/t U3O8 over a true width of 42 m, including 5.28 lb/t U3O8 over a true width of 9.6 m in drill hole M-05-02C.
Going forward, the markets will watch to see whether the jump in the gold price will hold up. The oil price may play a key role in this, and certainly will for the fate of energy stocks. Keep an eye out!