Stronger gold price fuels trading

The holiday-shortened week of May 19-25 saw considerable market activity, with the 10 most active companies all trading more than 6 million shares. (The markets were closed in Toronto on May 24 because of Victoria Day.)

Most of the action appears to be related to the price of gold. The spot price in the afternoon in London on May 25 closed at US$388.90 per oz., up US$11.20 from the previous week.

The S&P-TSX composite index was up on May 25 for the day by 143.7 points, and for the week by 191.53 points; it closed at 8,354.22 points. The TSX gold index closed up 6.08 points, or 3%, to finish the day at 203.27 points, up 11.7 points over the previous week. The diversified metals and mining index closed at 218.38, up 3.6% for the day on May 25 and up 17.3 points over the previous week.

A number of the same companies continue to be high-volume traders. Eldorado Gold led the way with a volume of 37.16 million shares. The stock closed up 36 to finish at $3.24 (29 million shares were traded in just two days). The company reported increases to operating and capital costs at its proposed Kisladag mine in Turkey, but the project still has a good projected rate of return at 29%.

Wheaton River Minerals traded 2.5 million shares more than a week earlier and ended second in terms of volume traded at 19.5 million shares. The stock ended the day at $4, up 42.

Iamgold traded third in volume at 11.8 million shares. It closed up 92 to close at $7.50. On June 8, shareholders vote on a merger between Iamgold and Wheaton River in a $2.2-billion all-share bid that would form a new gold major, to be called Axiom Gold.

Tahera traded a hefty 10.6 million shares, closing at 34, up 8. Tahera is awaiting approval from the Ministry of Indian Affairs and Northern Development regarding development of its Jericho kimberlite.

Bema Gold traded almost 10 times its volume of the previous week, at 8.7 million shares, and closed at $3.47, down 8 from a week ago. Bema recently reported a first-quarter net loss of US$14.2 million, which included a writedown of US$8.5 million on the sale of the Yarnell property in Arizona.

The greatest percentage gainer was Franc-Or Resources, whose shares closed at 25, up 78%, or 11, from the previous week on a volume of 877,000 shares. The company signed a letter of intent with Newmont Mining to complete a non-brokered private placement for $4 million. Proceeds will be applied to gold exploration and development in Russia.

Shares in Canadian Zinc shot up 57.4%. Trading volume doubled to 2.9 million shares and shares gained 31 to close at 85. Recent year-end and first-quarter results indicate the company is well-financed, with $14.67 million in cash as of March 31. The company is planning a major exploration program for the Prairie Creek property in the western Northwest Territories.

Birim Goldfields gained 36%, or 18, to end the day at 68 on a volume of 288,000 shares, though there was no news to account for the increase.

In terms of value changed, Cameco led the way. The shares closed up $6.98 to finish at $68.98 on a volume of 2 million shares.

Aber Diamond traded 445,261 shares to close at $44.89, up $4.93.