Base-metal miners enjoy favourable week

The report period Sept. 6-12 was not a kind one for the Toronto Stock Exchange. The 300 composite index lost nearly 1,000 points as it fell below the 11,000-point mark on Sept. 8. Despite the poor performance, some mining stocks — base-metal miners in particular — enjoyed a favourable week.

As expected, Noranda boosted its bid for Rio Algom by $3 over its previous $24.50 per share offer, 50 higher than London-based Billiton‘s offer. The sweetened offer came after Rio had rejected Noranda’s request to look at its books. Rio Algom shares slipped following the news, but recovered to end the report period at $28.70. Noranda closed the period at $15.10, little changed.

In other base metal news, Inco followed up the announced buy-back of its Class VBN shares by confirming that it was talking with the government of Newfoundland (albeit informally) about how to revive the stalled Voisey’s Bay project in Labrador. Inco ended the report period $27.40, up a dime from the previous period. The VBN shares fell 15 to $11.

Falconbridge returned some of its previous gains and ended the period by slipping $1.30 to $17.95. The strike at Falco’s Sudbury operations is now into its sixth week, with no end in sight.

Other upbeat base-metal miners include: Cominco, up a dime at $22.10; Sherritt International, up 15 to $5.25; Teck‘s B shares rose 35 to $11.60; Aur Resources jumped 69 to $3.24 and Breakwater Resources gained 35 to hit $$2.85.

Boliden added 4 to reach $1.42 despite a three-day suspension of production at its Aitik copper mine in northern Sweden due to damage to a tailings dam. On Sept. 9, a 100-metre section of containment wall eroded, allowing water and tailings to escape into the surrounding watershed. The Swedish environmental authority agreed with Boliden, saying that the incident could not be considered a natural catastrophe.

Overall, the TSE’s metal and minerals sub-index fell by 1% to 3,652.03 points.

Gold traded in a US$2-range throughout the period, slipping to a London PM of US$272.50 per oz. on Sept. 13. Palladium had the best showing of the precious metals. It added US$21 per oz. over the period to fix at US$755 per oz. The TSE’s gold and precious minerals sub-index grew by 2% to $4,242.78.

The country’s gold majors had mixed results. Ongoing takeover rumours helped push Placer Dome up $1 to $14.55. Barrick Gold, viewed by some as a possible (if unlikely) bidder for Placer Dome, lost a nickel to $23.80. Kinross Gold lost three pennies to 97.

SouthernEra Resources shot up nearly 50% to $2.83. The company and partner Caldera Resources recently confirmed the presence of a new kimberlite in Australia. Drilling will begin this fall. SouthernEra is earning a 51% interest in the joint venture by spending $1 million over four years. SouthernEra is also drilling a NWT property near the Snap Lake project owned by De Beers, Canada.