Gold prices went on a roller-coaster ride over the report period Oct. 25-31. There were thrills and chills in the gold-mining sector too, mostly in the form of Barrick Gold‘s unsolicited takeover bid for Placer Dome. The end result was a relatively active trading session, with both the Dow Jones Industrial Average and the broad-based S&P 500 posting modest gains. DJIA was up 55.07 points to close at 10,440.07, while the S&P gained 7.63 points to close at 1,207.01.
As might be expected, Placer Dome was the most active resource stock on U.S. markets as investors weighed the pros and cons of the proposed takeover bid made by Barrick — albeit with the help of more than US$1 billion in cash from Goldcorp. The news gave Placer a boost of US$3.98 to US$19.95, while Barrick was beaten back US$1.38 to US$25.25.
Is bigger better? That’s the question shareholders of both companies face. If the merger goes through, the biggest challenge for the combined entity will be reserve replacement at the staggering rate of 8.3 million oz. annually.
Newmont Mining took second spot on the most-active list, but shed US$2.39 to close at US$42.60. The company may also lose its status as North America’s largest gold-mining company if rivals Barrick and Placer tie the knot.
Copper giant Phelps Dodge lost US$6, one its sharpest drops in recent months, to close at US$120.47 over the trading session. The company has been rolling in cash of late, and recently announced it would use US$1.5 billion of its profits to “reward” shareholders in the form of dividends and share repurchases over the coming year.
Diversified miner Freeport McMoRan Copper and Gold went the other way, and posted a gain of US$1.29 to US$49.42.
Peru’s Buenaventura lost ground, and was down US$4.54 at US$25.77. The company produces gold and silver at various mines in Peru.
Be the first to comment on "Thrills and chills on US markets"