Metals take a hit

Canadian stocks fell a third day as commodities prices declined after a report showed the Chinese service industries stagnated in July.

Imperial Metals Corp. plunged 42% after the copper (COMEX:HGQ14) and gold (COMEX:GCQ14) producer reported a breach in the waste storage facility at its Mount Polley mine in British Columbia. Novagold Resources Inc. and Silver Standard Resources Inc. retreated more than 6.3% as gold and silver (COMEX:SIU14) prices dropped. Bonavista Energy Corp. lost 2.4% to pace declines among oil producers.

The Standard & Poor’s/TSX Composite Index lost 23.32 points, or 0.2%, to 15,191.94 at 10:33 a.m. in Toronto. The S&P/TSX was closed yesterday for a holiday in Ontario. The benchmark Canadian equity gauge closed at a record on July 30.

The services Purchasing Managers’ Index declined to 50.0, the dividing line between expansion and contraction, from June’s 53.1, HSBC Holdings Plc and Markit Economics said today. A similar official gauge released Aug. 3 dropped to a six-month low of 54.2.

Novagold Resources lost 6.4% to C$3.78, the biggest drop since May, and OceanaGold Corp. fell 4.1% to C$3.07 as raw-materials stocks slumped 0.8% as as group. Five of 10 industries in the S&P/TSX retreated on trading volume 38% higher compared with the 30-day average at this time of the day.

Gold, Crude

Gold futures for December delivery slipped 0.4% to $1,284.50 an ounce in New York. Prices have posted three straight weekly declines amid signs of improving U.S. economic growth.

Bonavista Energy fell 2.4% to C$14.06 and Penn West Petroleum Ltd. lost 0.8% to C$8.23. Crude (NYMEX:CLQ14) fell for the sixth time in seven days in New York amid forecasts that U.S. supplies will rebound from near six-year lows.

Imperial Metals sank 42% to C$9.69, its biggest loss ever. The storage facility at Mount Polley was breached early yesterday morning, Imperial said in a statement, releasing an undetermined amount of water and tailings, the materials left over after processing ore to extract valuable metals. The breach has been stabilized, although the cause of the incident is still unknown, the company said today.

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