For the second day in a row, Canada's main stock market, the
Toronto Stock Exchange, managed to rally late in the day and turn
earlier big losses in to a gain. On this Friday, the index was
under pressure from the off and eventually hit a day low of 15,182
almost right in line with the midday chimes amid geopolitical
concerns - especially those stemming from the first reports of
increasing tensions in Ukraine.
But the re-emergence of bargain hunters - and also maybe news
that a ceasefire appears to be holding in Gaza and that the new
leader in Iraq is calling for unity among locals against insurgents
- all led to a dramatic improvement and the overall index slowly
but surely recovered all of its earlier losses, and some more, over
the second half of the day. The TSX completed a near 120 point
turnaround it closing above 15,300.
Early Friday we learned that Canadian employment in July was up
42,000, twice the original consensus expectation and many more
times above the meagre figure of 200 jobs reported initially last
week, before a human error in calculating the original number was
corrected. But CIBC was among those to say that while the headline
number appeared impressive, details within the report were not
quite as strong.
Sectors were mixed, but the influential Energy and Mining
sectors were higher, which helped the resources heavy index.
Of commodities, brent and West Texas Intermediate crudes gained
on supply concerns after Ukraine forces reportedly attacked and
partially destroyed a convoy entering the country from Russia.
December gold futures were down Friday, settling at near
US$1,306 an ounce on the Comex division of the New York Mercantile
Exchange, representing a fall of near 0.4% on the week. September
silver fell Friday, settling at just under US$20 an ounce, or down
near 2% over the week.
Imperial Metals Corporation (III.TO), which have been under
severe pressure all this month and lost 7% in hitting fresh 52 week
lows yesterday,recovered near 16% Friday amid reports it is raising
$100 million in debt to cover cleanup costs at its Mount Polley
copper and gold mine in British Columbia. The tailings dam burst at
the mine, an incident that could cost the company up to $500
million to clean up.
Bloomberg said Imperial Metals plans to raise $100 million
selling convertible notes to help pay for the cleanup. Imperial's
largest shareholder, oil-sands investor Murray Edwards, has
committed to buying $40 million of the 6%, 6-year senior unsecured
convertible debentures via Edco Capital Corp., a company Edwards
The Fairholme Partnership LP committed to another $40 million of
Funds from the sale and Imperial's operations, and insurance
proceeds, will cover costs at Mount Polley as well as the
completion of its Red Chris project, Bloomberg reported.
Investors appear to taking some solace from this, as well as a
statement last night in which Imperial said: "While the precise
costs of remediation and repair are presently unknown, the company
believes that the costs can be managed over time, given the
underlying value of the company's assets and by the resources
provided by the additional financing."
Thursday night's Q2 result may also be underpinning the stock.
The company said adjusted net income in the June 2014 quarter was
$8.9 million ($0.12 per share) compared to $6.0 million ($0.08 per
share) in the June 2013 quarter. Revenues were $51.1 million in the
June 2014 quarter compared to $41.3 million in the comparative 2013
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