Benchmark lowered, resource stocks end mixed

The Toronto Stock Exchange S&P/TSX composite index shed 71.29 points over the June 12-18 trading period to finish at 7,327.54.

Gold rose US$2.30 in overseas trading to settle at a London morning fix of US$321.85 per oz. on June 19. Despite the increase, the gold sub-group was down 4.84 points as heavyweights Placer Dome fell 42 to $19.35 and Barrick Gold slipped 35 to $30.85.

With the market still digesting a proposed 3-way merger among Kinross Gold, TVX Gold and Echo Bay Mines, each stumbled in the current period on heavy volumes. Kinross was off 26 at $3.32 on 51.9 million shares; TVX was off 14 at $2.09 on 45.7 million shares; and Echo Bay was off 10 at $1.70 on 13.6 million shares.

Bema Gold and McWatters Mining were among the few gold miners to pick up steam over the period, with the former rising 2 to $1.96 and the latter adding a penny to close at 17. A few weeks back, Bema raised $25 million through an equity financing to fund ongoing drilling at the Julietta mine in Russia, among other activities. In April, McWatters announced completion of a restructuring program, as well as the proposed, fourth-quarter startup of the 60%-owned Sigma-Lamaque open-pit mine in Quebec.

Pan American Silver slipped 86 to $11.29 on news it had secured a US$10-million debt facility to begin building a 600-tonne-per-day leach circuit at the Colorada silver mine in Mexico. The loan covers half the expected capital cost, but the silver miner has more than enough cash on hand to cover the difference.

Canada’s base metal majors were mixed: Inco rose 42 to $33.52 as spot nickel climbed overseas; Teck Cominco‘s B-series fell 55 to $13.30; Noranda rose 14 to $19.74; and Falconbridge slipped 45 to $19.55. By the period’s end, Teck had filled two vacant executive positions and Noranda announced a walkout at its Horne smelter in northern Quebec.

Cameco also was down, slipping 62 to $41.38, as it announced its intention to buy the Smith Ranch in situ uranium mine in Wyoming from BHP Billiton. The deal, which has yet to be approved by regulators, concludes BHP’s exit from the uranium industry and brings it closer to eliminating all non-core assets.

Overall, base-metal issues were down 1%, with the metals and minerals sub-group slipping just over 2 points to 145.34. Copper and nickel were the only metals to lose value in London markets, though lead neither advanced nor retreated.

Junior Metallica Resources ascended 6 to $1.71 as more promising drill results were released from the El Morro copper-gold project in Chile. Partner Noranda is focusing its efforts on the Fortuna deposit, where one recent hole cut 484 metres of primary mineralization grading 0.66% copper and 0.91 gram gold per tonne, including 268 metres at 0.78% copper and 1.12 grams.