TSX enjoys gold’s good fortune

Gold rose US$6-even over the Nov. 10-16 report period to close at a 16-year high of US$439.40 per oz. in London. To the surprise of no one, the TSX’s gold index jumped 7.2 points, or more than 3%, to 224.45. The diversified metals & mining index was no slouch, gaining 11.47 points, or 4.7%, to 256.54 points, with higher metal prices across the board. Overall, the S&P-TSX composite index climbed 11.03 points to 8,952, just shy of a year-high.

Shares in Linear Gold enjoyed a late surge to end $4.35, or 116%, higher at a new 52-week high of $8.10. The latest pair of drill holes from the company’s Ixhuatan project in Chiapas, Mexico, included a 100.3-metre intersection grading 12 grams gold and 63.7 grams silver per tonne; the hole was terminated while still in mineralization.

Another nice percentage gainer was uranium explorer UEX, which jumped 53, or 28%, to $2.43. UEX and France-based Cogema are exploring their jointly held Black Lake property on the northern rim of Saskatchewan’s Athabasca Basin, where recent drilling returned up to half a metre grading 1.96% U3O8.

Wheaton River Minerals was the volume leader, with just shy of 40 million shares changing hands after a late slip to end two pennies higher at $4.27. The company’s earnings in the third quarter more than doubled from a year earlier to US$31 million, reflecting higher metal prices. More recently, Wheaton’s 75%-owned silver spinoff, Chap Mercantile, agreed to buy all the silver produced from the Zinkgruvan mine in central Sweden for US$75 million up front. The mine is expected to produce about 2 million oz. of silver per year for the next 19 years. For its part, Chap ended a dime poorer at 80.

Among the major miners, Noranda put on a late rally to finish 34 to the good at $21.30. On Nov. 16, Noranda said the period of exclusive talks aimed at agreeing to a buyout by China Minmetals had ended without a deal. The Canadian miner says strong metal prices influenced its decision not to extend the exclusivity period, which began in late September. Noranda continues to talk with Minmetals but is also pursuing alternatives, including remaining on its own.

Inco lost much of its earlier gains but managed to add 73 to close at $45.63. The nickel giant is rumoured to be among those kicking the tires at Australia’s WMC Resources. WMC recently rejected a hostile A$7.4-billion takeover bid from Swiss-based, diversified base metals miner Xstrata.

Canada’s major gold producers took advantage of the surging price of the yellow metal; Barrick Gold grabbed $1.05 to hit $27.95, Placer Dome made 30 to reach $26.52, and Kinross Gold finished 21 better at $9.86. A US$143-million reduction of the goodwill associated with its Paracatu mine in Brazil saw Kinross slip US$133.6 million into the red during the third quarter; the company had previously reported net earnings of US$9.4 million. The reduction reflects Kinross’s recent acquisition of the 51% stake in the mine it did not already own. Kinross says its cash flow remains unchanged US$62.5 million.