Toronto market catches breath

Settling down after its gyrations in recent weeks, the Toronto Stock Exchange closed a little lower during the report period Sept. 27 to Oct. 3. The TSE 300 composite index fell only 22.24 points over the five trading days to close at 10,456.35.

The two mining sectors both gained modestly during the same period, with the Metals and Minerals sub-group up 22.76 points to 3,418.52, a gain of 0.4% on the week, and the golds adding 15.28 points to finish at 3,998.34.

Gold settled back to its old range, despite another of those misplaced frissons on Sept. 28, when it rose to US$277.20 per oz. in London trading. The yellow metal saw a fix of US$271.30 on the morning of Oct. 4, down from US$274.75 a week earlier.

It was a quiet week for the platinum group metals as well, but a positive one, as palladium added US$10 to finish at US$725 per oz., and platinum added US$4 for a London fix of US$569.

The busiest golds were the big boys, with Barrick Gold down 5 at $22.40 on a volume of 4.3 million shares, and Placer Dome unchanged at $13.85 with 4.2 million shares riding the tape.

Franco-Nevada Mining recovered during the period, adding 80 to finish the trading period at $15.15. Despite Franco’s insistence that the proposed merger with Gold Fields effectively died when it was blocked by the South African government, the market clearly is looking for some kind of a deal from the cash-rich royalty company. Franco and Gold Fields management were talking at the Denver gold show, fuelling rumours that a revised merger deal was in the works.

On the precious-minerals side of the sub-group, Aber Diamond, which has been mooted as the next takeover target in the diamond business, was off 50 to close at $12, Dia Met Minerals saw its B-series shares slide 95 to $19.40 and its A-series slip 50 to $17.45, and Namibian Minerals was up a nickel at $3.75.

The London base metal market was broadly lower, with nickel taking the worst punishment as it fell US32 to US$4.04 per lb. Copper was down US1 at US88, aluminum slid US2 to US71, and zinc was off US2 at US52.

With Noranda withdrawing from the Rio Algom takeover battle, the arbitrageurs were left without a lifeline, and bailed out quickly. Rio saw 18.2 million shares trade as the price fell $1.50 to close at $26.95, just under Billiton’s bid of $27 per share for the company.

Noranda, meanwhile, was rewarded — just a little — for its conservatism in not pursuing the Rio takeover, rising 25 to close at $14.40. It was rewarded a bit more for its audacity, seeing that it will profit around $48 million from tendering its own Rio shares to the Billiton bid.

Despite the weakness in the nickel price, Inco was unchanged at $24.45 and Falconbridge was up 55 at $17.45. Falco did get some good news during the period, reaching an agreement with the union at its Nikkelverk refinery in Kristiansand, Norway, that will keep production flowing there. The workforce at Kristiansand had been ready to refuse to process blister copper produced by management personnel at Falco’s strike-bound Sudbury smelter.

Aur Resources was off 22 at $2.83, on announcing that it had arranged a bought-deal equity financing with two investment houses, with 10 million shares issued at $2.90. The $29-million gross goes toward payments on the Quebrada Blanca copper mine in northern Chile, which Aur is buying from Teck and Cominco.

Among the Eastern juniors, Montreal-listed Tandem Resources rode 21 higher to close at 33 on news that it has recovered diamonds from a kimberlite dyke near Abloviak Fjord in far northern Quebec. Tandem can earn a 40% interest in the property from a private company by spending $2 million on exploration.