Golds retrench but base metals higher

The Toronto Stock Exchange was only fractionally higher through the trading period Jan. 8-14, with the composite index up 8.2 points, or 0.1% of value, at 6,810.98. Most of the market sectors moved sideways, except the golds, which fell back, and the base metals, which saw a nice gain.

The gold group declined 7.9 points to 187.70 even as the price of bullion stayed buoyant. The London gold fix on the morning of Jan. 15 was US$351.90, up US$5.15 on the week — though having touched US$354.60 on Jan. 9, it fell back slightly over the rest of the trading period.

Kinross Gold was the most active issue in the group, sliding back 14 to finish at $3.53 with 38.5 million shares changing hands. Prospective merger partners Echo Bay Mines and TVX Gold were actively traded too: 5.2 million Echo Bay moved as the stock fell 9 to $1.81, and 1.5 million TVX were traded, with the stock falling $1.05 to $22.65. The trio have scheduled shareholders’ meetings for the end of January to approve their merger proposal, which would see Echo Bay shareholders get 0.52 of a Kinross share for every Echo Bay share, and TVX shareholders get 6.5 shares of Kinross for each share of TVX.

Also during the period, TVX declared a force majeure on deliveries from its Stratoni base metal mine in Greece after the Greek government ordered a temporary halt to mining while various agencies examine permitting studies for an expansion at the mine.

Another heavily traded gold was Placer Dome, down 57 to $17.11 with 16 million shares riding the tape. Its chief executive, Jay Taylor, suggested the company may be ready to gear up development at some of its marginally economic properties, such as Getchell in Nevada.

The mid-tier amigos mostly lost ground, though Glamis Gold picked up 64 to close at $18. Meridian Gold fared the worst, falling $2.89 to 23.16, while Agnico-Eagle Mines was down $1.65 at $20.65 and Goldcorp slid 93 to $18.57.

Off the index, there may have been less profit-taking, as Aurizon Mines lost only 3, falling back to $1.43, Richmont Mines backed off 30 to $5.70, and River Gold picked up a nickel to close at $3.55. Rio Narcea Gold, whose Aguablanca nickel project has begun to attract attention, was 32 better at $2.34.

Positive sentiment about the nickel price, which rose another 17 in the period to US$3.64 per lb., probably drove some of the Sherritt increase, while pushing Inco $1.49 higher to $35.30 and Falconbridge, $1.85 higher to $17.75. Noranda was up, too, tacking on $1.03 to finish at $16.12; only Cameco was down, backing away 46 to $39.

Among the smaller base-metal producers on the index, Aur Resources closed at $3.90, up 14, and LionOre Mining International rode the nickel wave, adding 27 to close at $5.47. Off the index, Inmet Mining was up a dime at $6.