Resource Stock Roundup: Tuesday, June 23rd, 2009
Jun 23rd, 2009 | By Doug Casey | Category: Gold MarketInvestors bailed out of the equity markets in a big way during Monday’s session on the Canadian Markets. For the tale of the tape, the TSX Exchange plunged 4.41%, while the TSX Gold Index dropped 5.5% and the TSX Venture Exchange, Canada’s largest junior exploration bourse, fell 3.59% with the decliners beating out the advancers by a 632 to 213 margin on a lower than normal 156 million shares traded.
The real news of the day did not involve any Canadian listed companies but it was a doozy. Xstrata (LON:XTA) proposed an all-share merger of equals with Anglo American (NASDAQ:AAUK) in a move that would create the world’s third largest mining company. For its part, Anglo flat out rejected the proposal. Stay tuned.
Fresnillo PLC has withdrawn its offer to buy Mag Silver. Fresnillo has not been able to conclude the independent valuation of Mag required under applicable Canadian securities laws in order to permit the offer to proceed and it is not clear to Fresnillo when or if this will happen. Mag ended the day down C$0.23 at C$5.32.
Victoria Gold bucked the downward trend after reporting a drill intercept of 2.5 grams gold per tonne over 274.3 metres at is Helen zone on the Cove project in north-central Nevada. Victoria added C$0.01 to close at C$0.39.
Shares of Andean American Mining fell C$0.055 to C$0.235 after the company reported that its Invicta project has a projected capital cost of $65.3 million with a net present value at an 11 per cent discount rate of the five-year free cash flow net of debt amortization of $159-million. All this using a gold price of $900 per ounce and copper price of $2 per pound.
Worries that the global economic recovery will be slower than some had been anticipating put pressure on resource stocks. Will we get the usual rebound on Tuesday or will the selling continue? We will see.
Source: Resource Stock Roundup: Tuesday, June 23rd, 2009
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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.