Placer Dome shuffles off Las Cristinas to Vannessa

While gold prices sat in a listless, US$265-per-oz. funk during the July 11-17 report period, there was a flurry of news from Canada’s biggest gold miners.

Placer Dome announced an eleventh-hour deal to sell its 70% interest in the stalled Las Cristinas gold project in Venezuela to CDNX-listed Vannessa Ventures, for an undisclosed, non-cash consideration.

Placer’s contract for its stake was due to expire on July 15, but the company had suspended its participation in 1998, citing low gold prices, and had written off the investment in mid-2000.

Never one to give up, Crystallex International declared a renewed intention to try to take over the project, after failing in previous court actions.

Over the week, Placer gained 60 to $15.80 while Crystallex rose 10 to $2.63.

In the meantime, Placer is eyeing the Pueblo Viejo gold project in the Dominican Republic, where past mining operations by a unit of Amax and state-owned Rosario Dominicana yielded 5 million oz. gold and 22 million oz. silver.

Cambior traded up a penny to 78 as it celebrated an easy $2-million windfall from the Quebec government, well known for divvying out cash, tax breaks and other incentives to local companies. The funds are earmarked for advanced exploration at the Mouska, Doyon and Sleeping Giant gold mines, all situated in Quebec’s Abitibi region.

Kinross Gold jumped 11 to hit $1.41 as it completed the acquisition of 945,400 convertible preferred shares ($3.75 Series B) of its subsidiary Kinam Gold, which trades on the New York Stock Exchange. In return, Kinross is paying 24.2 million common shares.

Continuing its restructuring, TVX Gold announced the appointment of George Michals as non-executive chairman, replacing Sean Harvey, who continues on as president, chief executive officer and a director. Harvey had been interim chairman following the departure of long-time chairman Eike Batista. Over the week, TVX declined another 7 to 68.

Among the remaining larger companies, Barrick Gold rose $1.20 to $23.40; Franco-Nevada Mining was up $1.28 to $20.50, and Goldcorp surged $1.10 to $17.

It was a sour week for the platinum-group-metals market, as palladium came back down to Earth and once again became cheaper than platinum. Spot palladium sank US$45 over the week to US$518 per oz. while spot platinum fell US$31 to US$524 per oz. Having hedged a good portion of its production at much higher prices, Canada’s North American Palladium held steady at $10.66 while shares of its U.S.-listed competitors, Amplats and Stillwater Mining, took hits of 10% or more.

The big story among the base metal producers was the battering meted out to Alcan‘s shares, which dove $6.33 to $56.87 upon the release of unexpectedly low second-quarter earnings. The company reported net income of US$74 million in the quarter, or less than half the year-earlier earnings of US$153 million.

Over on the West Coast, Cominco shareholders voted overwhelmingly in favour of the proposed C$1-billion merger with parent company Teck, paving the way for the creation of a new, more-diversified company named Teck Cominco. Cominco shareholders are to receive 1.8 class B shares of Teck plus C$6 in cash for each Cominco common share held. Over the week, Cominco was off $1 to $27.35 while Teck’s B shares declined 75 to $11.85.

The outlook for zinc is getting downright bleak, with a recession looming and the Chinese ratcheting up production. With zinc prices now slumping to an 8-year low below US40 per lb., major zinc miners are becoming penny stocks, with Boliden down 8 over the week to 31 and Breakwater Resources falling below $1 at presstime.