Resource Stock Roundup: Friday, July 25th, 2008
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The selling of commodity related stocks continued on the Canadian markets during Thursday trading.
For the tail of the tape; the TSX Exchange lost 2.20%, while the TSX Gold Index dropped 0.5% and the TSX Venture Exchange, Canada’s largest junior exploration bourse, fell 1.72% with the declining issuers beating out the advancers by a 589 to 324 margin on volume of 129 million shares traded.
The big news of the day was Kinross Gold’s all share bid to buy former market darling Aurelian Resources (TSE:ARU). The friendly deal is valued at around C$1.2 billion and would see Aurelian shareholders get 0.317 of a Kinross share, plus 0.1429 of a warrant for each Aurelian share held. The Kinross warrants have an exercise price of C$32 per and have a five year term. There is a $42 million break fee attached. Kinross also agreed to purchase 15 million shares of Aurelian at a price of C$4.75 per share. The move would give Kinross the highly touted but politically troubled Fruta del Norte gold deposit in Ecuador. Aurelian ended the day up C$1.86 at C$6.31, while Kinross lost C$2.14 to close at C$18.70.
On the earnings front, Agnico Eagle Mines (NYSE:AEM) saw its second quarter profit fall 78% thanks in large part to lower zinc prices at its LaRonde mine. Net income tallied $8.3 million or $0.06 per share compared to $37.8 million or $0.27 per share in the year ago period. Agnico ended the session down C$5.02 at C$59.78.
Potash Corp of Saskatchewan (NYSE:POT) upped its 2008 forecast after posting a second quarter profit of $905.1 million, or $2.82 a share. That is more than triple its $285.7 million, or $0.88 per share profit tabled in the year ago period. Not good enough in a down market as Potash ended the session at C$196.85, for a C$5.38 loss.
Meanwhile, Teck Cominco (NYSE:TCK) saw its second quarter earnings rise a modest 2.5% to C$497 million from C$485 million a year earlier. Driving the gain was higher copper and coal sales. Teck ended the day down C$0.52 at C$38.66.
The bears have a firm grip on the resource-rich Canadian markets and without a storm or some political tensions the losses look set to accelerate. We will see what Friday trading has in store.
Source: Resource Stock Roundup: Friday, July 25th, 2008
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Tags: , AEM, ARU, Doug Casey, Gold Price, KGC, mining stocks, POT, TCKAbout the Author
Doug Casey is a contrarian investor, sought-after public speaker and author of several books. His work "Crisis Investing" held the position of # 1 bestseller on the New York Times list for 26 consecutive weeks. Doug's unusual views on the economy - and just about everything else - have gained a huge following in the investment community, and it certainly helps that his stock recommendations of undervalued junior exploration companies have made his subscribers millions. Now in its 27th year, Doug's monthly newsletter, the International Speculator, is one of the most established and esteemed publications on gold, silver and other natural resource investments. Together with the Casey Energy Speculator, it covers a broad range of carefully selected stocks with the very real potential of double- and triple-digit returns within 12 to 24 months.