Kinross jumps to senior ranks as gold soars

Although it came as no surprise, Kinross Gold made headlines over the Jan. 28-Feb. 4 report period by concluding its long-awaited 3-way merger with TVX Gold and Echo Bay Mines to become Canada’s newest major gold producer and the world’s seventh-largest.

TVX shareholders received 216.67 Kinross shares for every 100 shares tendered, while Echo Bay shareholders got 17.33 Kinross shares for every 100 shares. Some residual trading of TVX and Echo Bay shares continues, effectively making them calls on Kinross shares.

Kinross subsequently consolidated its shares on a 1-for-3 basis and now has 314 million outstanding. Of those, 13.8% are held by U.S.-based Newmont Mining, making it the company’s single largest shareholder.

Kinross teeter-tottered over most of the period, before spiking to $12 on the final day, when the consolidation took affect. Overall, the company was up 93 on the week.

Canada’s two other major producers were mixed, with Barrick Gold rising 8 to $25.49 and Placer Dome easing back 5 to $17.75. Also mixed were the mid-tier trio: Agnico-Eagle Mines rose 50 to $22.75; Meridian Gold fell 53 to $25.05; and Goldcorp pushed ahead 9 to $19.38.

Meanwhile, physical gold continued its upward climb of late, vaulting US$18.15 over the five trading days to a London morning fix of US$385 per oz. on Feb. 5 — its highest in six years. Most of the gains came on the final day, hours before U.S. Secretary of State Colin Powell was expected to reveal evidence of Iraq’s concealment of weapons of mass destruction.

On the whole, the golds squeaked out a 0.3% gain to end the period at 200.98 points.

Cambior was a noteworthy off-index issue, rising 19 to $2.19 as it announced the start of development at the Rosebel gold project in Suriname. Reserves there are pegged at 36.9 million tonnes grading 1.63 grams per tonne.

Inco was the biggest newsmaker in the base metals group, announcing it had lost US$1 million in the fourth quarter and US$1.5 billion in all of 2002. The yearly loss was expected, given the US$1.6-billion Voisey’s Bay writedown in the third quarter; the quarterly loss was not, and many analysts showed their disapproval by quickly lowering their targets for the major’s shares. The market itself shaved 8% off the company’s shares, mostly after the earnings revelation, to value them at $30.65 at the period’s end.

Among the rest of the pack: Noranda sank 95 to 13.60; Teck Cominco‘s B series rose 4 to $12.06; Falconbridge fell 73 to $16.65; and Sherritt International slipped 18 to $4.66. The entire diversified mining and metals group was off 5.48 points at 129.36.

Pacific North West Capital climbed 7 to 60 as it resumed drilling at its River Valley platinum-palladium project in Ontario.