Trading Summary (May 22, 2003)

World stock markets mainly advanced strongly on Thursday, and the Toronto exchange was no exception. The TSX Composite index rose 52.94 points to 6,779.34, a gain of 0.8%.

That — and a $4 drop in the gold price, was a signal for profit-taking in the gold equities. The TSX Gold index fell about the same amount in percentage terms as the broader market gained, closing at 167.53, down 1.3 points or 0.8% of value.

The gold equities were almost in uniform decline, but as has been usual of late, Eldorado Gold was out of phase with the rest. The small producer continued its comeback after announcing on Tuesday that it was decreasing production forecasts at the Sao Bento mine in Brazil. Eldorado was up 15 to $2.30 on a volume of almost 4.4 million shares.

Kinross Gold was the volume leader on the index, watching 6.3 million shares change hands. The newest of the seniors was off 11 at $9.32.

Barrick Gold fell only 2, to $25.16. It announced it had reached an agreement with the Wiradjuri Condobolin Native Title Claim Group over the development of its Cowal gold property in New South Wales, Australia. The agreement, which is essential before a mining lease can be issued, provides for tertiary-level scholarships and for employment training for Aboriginals, and establishes an Aboriginal-held corporation to dispense benefits and provide services in the region.

The general advance in the market also brought bargain-hunters into the base metal sector. The TSX Metals and Mining index outpaced the broader market, gaining 1.66 points to finish at 118.07.

Not unusually, the buyers returned preferentially to the blue chips, with Inco seeing the best percentage gain on the board and Noranda the highest trading volume. Inco was up 77 at $25.92 on a volume of just under 1.5 million shares, and Noranda up 24 at $11.95 on just over 1.5 million. Credit-rating agency Standard & Poors also affirmed its existing BBB- rating on Noranda’s long-term debt and its A3 rating on the company’s short-term debt.

Falconbridge announced it had sold US$250 million in debt notes that mature in 12 years and bear interest at 5.375%. The company had filed a prospectus in the United States last week to permit the sale of debt in the U.S. Falconbridge was up 22 at $15.62.

Aur Resources gave up yesterday’s gains, falling 8 to $3.29, Ivanhoe Mines fell back a penny to $3.20, and Sherritt International was off 6 at $3.99, but one smaller base metal producers improved: LionOre Mining International was up a dime at $5.55.

Off the indexes, FNX Mining was down a nickel at $6.40, even though it is now producing nickels (in concentrate form, that is) at its McCreedy West project in the Sudbury area, a joint venture with Dynatec. Dynatec was off 2 at 65. Both saw relatively heavy trading, with volumes of 4 million FNX shares and just under a million Dynatec.

Trading in Queenstake Resources was quiet when it resumed today after the company announced a successful bid for the Jerritt Canyon operation in Nevada. Queenstake shares were down half a cent to 26; shares in one vendor, Meridian Gold, were off 23 at $15.40, while on New York, shares in operator AngloGold fell US98 to US$29.92.

Canada’s junior exchange ended the session higher with advancing issues leading decliners by a 316-to-285 margin. The S&P-TSX Venture Exchange composite index tacked on 1.12 points, or 0.1% and closed at 1,079.53.

Shares in Kensington Resources tumbled back to earth, dropping 27 to 98 on a volume of over 1 million. Yesterday, news that joint venture partner De Beers has recovered a 10.23 carat diamond from the 140-141 kimberlite on the Fort a la Corne property in Saskatchewan sent Kensington stock soaring. The diamond is a dodecahedral aggregate stone with two dimensions measuring 14-by-15 mm. The value of the stone remains undetermined, as is the potential impact on grade forecasts and average values for the kimberlite. Kensington, which holds a 42.25% stake in the property.

Fellow Saskatchewan diamond explorer Shore Gold also felt the hangover from yesterday’s run-up, losing 7 to close at 89 on just over 1.1 million shares traded. The junior is in the process of completing a bulk sampling program on its Star kimberlite property.

Copper Ridge Explorations ended the day unchanged at 6 on 412,000 shares traded. The junior recently tabled plans for a surface exploration program on its wholly-owned Scheelite Dome gold project, near Mayo in the Yukon. The property features one of the largest and strongest gold soil geochemical anomalies in the in the Tintina Gold trend. Drilling is planned for later this year.