Resource companies tied to Argentina took it on the chin Thursday as the south American country defaulted for the second time this century.
Analysts said the move does not inspire confidence in Argentina, raising fears that exchange controls may impact the ability of metal producers to repatriate their profits down the road.
“It gives Argentina a bad name,’’ said Michael Fowler, senior mining analyst with Loewen, Ondaatje, McCutcheon Ltd.
First Quantum Minerals Ltd. (
TSX: T.FM,
Stock Forum), which recently agreed to acquire
Lumina Copper Corp. (
TSX: V.LCC,
Stock Forum) and its flagship Taca Taca project in a $470 million deal, was down 4% to $25.99.
Madalena Ventures Inc. (
TSX: V.MVN,
Stock Forum), which as oil and gas interests in Argentina, was off 4.2% to 46 cents, leaving a market cap of $241.5 million, based on 525.1 million. The 52-week range is 83 cents and 33.5 cents.
Crown Point Ventures Ltd. (
TSX: V.CWV,
Stock Forum), a company engaged in the development of oil and gas deposits in Argentina, was down 4.7% to 30.5 cents, leaving a market cap of $32.4 million, based on 104.5 million. The 52-week range is 93 cents and 19.5 cents.
Still, the selloff was far from being a rout and one analyst wondered how much of the decline in these stocks is attributable to developments in Argentina. “It’s not like this was a shock,’’ said David Charles, of Dundee Capital Markets in Montreal. "People have been talking about this for weeks."
Yamana Gold Inc. (
TSX: T.YRI,
Stock Forum), with interests in two open pit mines in Argentina, was up 1.5% to $9.22.
After declining in recent days, Americas Petrogas Inc. (
TSX: V.BOE,
Stock Forum), bucked the trend, rising 1.7% to 59 cents, leaving a market cap of $134.6 million, based on 228.2 million shares outstanding. The 52-week range is $1.85 and 48 cents.