Golds slump as base metals follow suit

The Toronto Stock Exchange’s composite index lost 114.61 points, or 1.6% of its value, during the June 18-24 report period, largely as a result of the weaker gold price. The yellow metal lost US$11.50 per oz. to finish at US$348.25 on June 24 in New York. It was no surprise, then, to find the TSX’s gold index 8.18 points lighter at 163.51.

Wheaton River Minerals was the volume leader, with nearly 34 million shares finding their way 4 lower to $1.60. The company recently boosted its stake in the Bajo de la Alumbrera gold-copper mine in Argentina to 37.5% by picking up half of BHP Billiton’s quarter-stake for US$90 million. Northern Orion grabbed the other half at the same price. For their part, Northern Orion shares gained a nickel to end at $1.38.

Eldorado Gold was next in line, dropping a dime to $2.22 with 26.3 million shares crossing the floor. Since the beginning of the year, South Africa’s Gold Fields has sold its entire 14.78% interest in Eldorado into the market. The selloff was complete by June 20.

Also heading south was McWatters Mining, which ended 3 cheaper at 14, after trimming its 2003 gold production estimate at the Sigma-Lamaque open-pit operation in Val d’Or, Que., by about 20,000 oz. to around 100,000 oz. The company is looking to raise $7 million to fix some waste issues at the open-pit mine.

Standing out was Miramar Mining, which gained 4 to reach $1.74. Recent drilling on the Hope Bay gold project in Nunavut has doubled the depth of the Suluk zone, and turned up three new targets — South Nexus, Gas Cache and Boston NE — in the Boston area.

The country’s major gold producers lagged behind. The busiest, Placer Dome, traded just short of 14 million shares as the stock slipped $1.30 to $15.55. Kinross Gold ended 79 lighter at $9.02, while Barrick Gold lost $1.67 to $23.68.

Off the index, junior Yamana Resources surged 4, or about 67% of its value, to a dime on news of an agreement to buy Companhia Vale do Rio Doce’s 100,000-oz.-per-year Fazenda Brasileiro gold mine in northeastern Brazil.

Also active was Niocan, which added 20, or a third of its value, to make 80. Quebec’s Administrative Tribunal recently approved the company’s Oka niobium project, near Montreal. The province’s Ministry of the Environment still needs to do the same before the project can proceed.

Base metal prices were lower across the board, helping the diversified mining and metals index lose 2.76 points to end at 128.8. Falconbridge shed $1.35 to $17.50 despite tabling positive development plans for its Montcalm nickel-copper project near Timmins.

In the lower ranks, American Mineral Fields shot up a quarter, or around 45%, to 80. The junior is developing its Kolwezi cobalt-copper tailings project in the Democratic Republic of Congo, where reserves are pegged at 112.8 million tonnes of oxide tailings grading 0.32% cobalt and 1.49% copper.