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TSX Venture continues to rise, Oct. 21-25

2013-10-28

VANCOUVER — The S&P TSX Venture Composite Index registered gains for the second consecutive week during the Oct. 21-25 trading sessions, jumping roughly 2.4%, or 22.61 points, before closing out the period at 973.58 points. Precious metals futures continued to rise, while energy and base metal prices remained relatively static. Markets were bolstered by strong earnings results from Canadian gold producers, and a report that China's manufacturing growth hit a seven-month high in October.

Gold futures continued to rally during the week, with December contracts for bullion jumping 2.7%, or US$35.50, en route to a US$1,350.70 close. December contracts for West Texas Intermediate (WTI) crude oil finished in the red for a second consecutive week, dropping roughly US$3.12 before closing out the trading period at US$97.87 per barrel. Copper futures continue to tread water, with December contracts for the red metal dropping US2.7¢ en route to a US$3.27 per lb. weekly close.

Explorer Kennady Diamonds was on the rise following news of two successful financings that saw the company raise around $14 million. Kennady jumped 43¢ during weekly trading before closing at $5.73 per share.

The company announced a $7-million, non-brokered private placement in early October, but increased the offering twice over the past two weeks. Kennady ended up raising $9 million via the issuance of 247,100 flow-through shares at a price of $5.50 per share and 1.6 million non-flow-through shares at a price of $4.75 per share.

Kennady raised another $5 million through a bought-deal private placement wherein underwriters — including Dundee Securities and Salman Partners — sold 910,000 flow-through shares at a price of $5.50 per share. The underwriters exercised an option to increase the private placement by $1 million.

Montreal-based Arianne Phosphate gained 20¢ during the week on 1.23 million share trade volumes, following the release of a feasibility study at its Lac à Paul project located north of Saguenay-Lac-Saint-Jean, Quebec. The company closed at $1.44 per share.

Arianne's study models an open-pit mine that would annually produce roughly 3 million tonnes of phosphate concentrate at an average grade of 38.6% P2O5. The US$1.2 billion project would run at around 55,000 tonnes per day, and features a US$1.9 billion pre-tax net present value at an 8% discount rate, as well as a 20.7% internal rate of return and 4.4 year pay-back period.

Drill results provided a boost for Mexico-focused explorer Newstrike Capital, which released assays from a program at its wholly-owned Ana Paula gold project in Guerrero State. The company was up around 20%, or 16¢, during weekly trading en route to a 97¢ per share close.

On Oct. 23 Newstrike announced results from hole 13-215, which cut 72 metres grading 3.92 grams gold per tonne from 748 metres down hole, including 39 meters of 6.42 grams gold from 677 metres depth. The hole was drilled northerly across the plunge of Ana Paula's breccia zone to test the continuity of the breccia body and associated high-grade mineralization at depths below Newstrike's existing open-pit resource.

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