Franco, Normandy rise on Newmont bid

Gold prices experienced two mini-rallies during the Nov. 7-13 trading period before settling down to a trading range of US$277-278 per oz.

The first spike came on the morning of Nov. 12 following the crash of American Airlines flight 587 in New York, N.Y.. The second rally occurred in response to Newmont Mining’s surprise all-share bid for Franco-Nevada Mining and Normandy Mining.

Over the period, Franco-Nevada Mining rose 20 to $23.20 and traded at $24.67 at presstime, while Normandy rose 80 to $11.75 and traded at $12.80 at presstime. Overall, however, Canada’s senior gold producers declined as gold prices failed to maintain their recent momentum: Barrick Gold fell 56 to $24.51; Placer Dome dropped 98 to $17.52; Kinross Gold was off 4 to $1.31; TVX Gold was off a penny to 64; and Cambior traded down 4 to 71.

The mid-tier producers suffered worse, giving back all of the previous week’s gains: Agnico-Eagle Mines dropped $1.05 to $15.55; Goldcorp sagged 94 to $17.70; Meridian Gold gave back 75 to hit $17; and Glamis Gold eased off 3 to $5.15.

Silver-miner Pan American Silver dropped 21 to $5.26 as it released much-improved third-quarter results highlighted by a small profit and a 138% increase in quarterly silver production to 2.1 million oz.

Canadian base metal majors enjoyed a broad rally as spot prices for nickel, copper, zinc and lead all increased substantially: Noranda popped up 70 to $14.70; Teck Cominco‘s B shares rose 70 to $11.55; Inco advanced $1.84 to $24.19; Falconbridge tacked on $1.20 to $15.90; Boliden was up a penny to 27; and Sherritt International gained 28 to $4.50.

Without releasing any news, embattled zinc miner Breakwater Resources surged 12 to 27 and traded at 35 at presstime.

Crew Development rose 2 to 55 as it reported that its African subsidiary Metorex had a slightly lower net income of $1 million for the three months ended Sept. 30, 2001, on revenue of $32 million.

Cameco, which supplies about 25% of the world’s uranium, posted a 50% rise in third-quarter earnings, thanks to a solid contribution from its new Bruce Power nuclear-plant partnership in Ontario. The company pocketed net income, before special items, of $15 million (or 27 per share) on revenue of $170 million. Over the period, Cameco fell $2.11 to $37.75.

Leading the trading activity in the diamond sector was Aber Resources, which continued its stellar 6-week rise and added another 90 to hit $18.85. In early November, Aber announced it had arranged a US$230-million loan from a lead group of five banks to cover the remainder of its financial obligations for the Diavik project in the Northwest Territories, currently being built with partner Rio Tinto. The loan is sufficient to fund Aber’s share of all budgeted expenditures to complete the project, including ongoing exploration.