Canadian Stocks Fluctuate as Aurizon Mines Shares JumpEric Lam
Canadian stocks rose for a fifth day, the longest streak since November, as a rally in acquisition targets Aurizon Mines Ltd. and Uranium One Inc. offset declines in energy shares.
Aurizon Mines soared 33 percent as Alamos Gold Inc. offered C$780 million ($793 million) for the company. Alamos sank 12 percent. Uranium One jumped 15 percent as Russian state-owned JSC Atomredmetzoloto planned to buy the rest of the company it doesn’t already own for C$1.3 billion. Research In Motion Ltd. surged 10 percent amid signs that demand for rival Apple Inc.’s iPhone 5 is slipping. Tahoe Resources Inc. slid 6.9 percent after an attack at its silver mine in Guatemala.
The Standard & Poor’s/TSX Composite Index rose 0.91 point, or less than 0.1 percent, to 12,603.09 in Toronto. The benchmark gauge has gained 1.4 percent this year. Trading volume was 43 percent higher than the 30-day average.
“It’s a bit of a quiet start to the week; some of it is nervousness after the strong start to the year,” Greg Taylor, fund manager with Aurion Capital Management, said on the phone from Toronto. His firm manages about C$8 billion. “The Alamos-Aurizon deal has people scratching their heads as there aren’t a lot of synergies. It seems RIM goes up when Apple goes down, and it probably isn’t any more complicated than that.”
RIM climbed 10 percent to C$14.70 as technology companies paced gains in the S&P/TSX. RIM, based in Waterloo, Ontario, is set to debut its BlackBerry 10 line of smartphones on Jan. 30.
A report in Japan’s Nikkei newspaper today said Apple has reduced its orders for iPhone 5 screens this quarter by about half from its original target of 65 million displays. Apple fell 3.6 percent to $501.75 in New York.
Aurizon, Uranium One
Aurizon Mines jumped 33 percent to C$4.55, its biggest gain since May 2006. Alamos Gold, a gold producer in Mexico, offered to buy the company for either C$4.65 or 0.2801 of an Alamos share for each Aurizon share. If successful, the bid would give Alamos Gold access to projects in the Abitibi region of northwestern Quebec.
Alamos, which already owns a 16 percent stake in Aurizon, plunged 12 percent to C$14.90, the biggest loss since January 2009.
Uranium One soared 15 percent to C$2.77, its highest close since May. Russia’s ARMZ together with other units owns 51.4 percent of Uranium One. The C$1.3 billion offer is a 32 percent premium to the company’s 20-day weighted average price in Toronto, the company said.
Harry Winston Diamond Corp. gained 4.4 percent to C$14.90, paring earlier gains of as much as 12 percent after agreeing to sell its watch and jewelry unit to Swiss watchmaker Swatch Group AG for about $1 billion.
Robert A. Gannicott, chief executive officer of the diamond miner, said in an interview that the company also is interested in acquiring Rio Tinto Group’s 60 percent stake in the Diavik mine in the Northwest Territories. Harry Winston owns 40 percent.
Tahoe Resources sank 6.9 percent to C$16.96 after the company said two security guards were killed in an ambush at its Escobal silver mine in Guatemala on Jan. 12. The attack was one of three against mining entities in Guatemala this week, Tahoe said.
Talisman Energy Inc. lost 2.6 percent to C$11.78. Talisman slumped after the stock was cut to market perform from outperform at Raymond James Financial Inc.
Encana Corp., Canada’s largest natural gas producer, slipped 2.3 percent to C$19.05 after Chief Executive Officer Randall Eresman resigned on Jan. 11. Eresman will serve as an adviser until Feb. 28. Clayton Woitas, a member of the board, will fill in as chief executive until a successor is found.