Metals gain in firming market

An end-of-week rally saved the Toronto stock market from posting a loss during the reporting period Nov. 8-14. A broad-based recovery brought the TSX Composite Index back to 10,684.72, for a net gain of 3.54 points over the five trading days.

The mining stocks were mostly insulated from that ride, as both mining sectors saw gains during the same period. The TSX gold index moved up 4.99 points to 220.08, a gain of 2.3%, and the mining and metals index was up 6.17 points to 369.13, a gain of 1.7%.

The biggest news in the base metal sector was Companhia Vale do Rio Doce’s improved bid for Canico Resource. CVRD raised its bid to $20.80 per share, which brought Canico management and its financial advisors on board. CVRD has now tied up an 11.5% holding from the management and directors of Canico, and will be entitled to match any competing offer or pick up a $32.8-million break fee if the deal is scuttled.

Buoyant copper prices lifted the copper-sensitive stocks on the index, with Aur Resources gaining 43 to close at $10.34 and Inmet Mining up 55 to close at $23.50. One exception was First Quantum Minerals, which was off 99 to finish at $28.50. The company announced third-quarter earnings of US$39.5 million (US64 per share) on revenues of US$143 million.

Another copper producer, Ivanhoe Mines, was down 4 at $8.86 after announcing a loss of US$16.4 million on revenues of US$15.4 million.

There was little new to move shares of Inco, which were up $4.19 to $53.90, or of Falconbridge, which were up $1.12 to $35.55. Time may be running short for a return bid from Xstrata, which holds 20% of Falconbridge’s shares.

Western Silver was a big percentage gainer, rising $1.70 to $11.21 in response to feasibility numbers for the Penasquito project in Zacatecas state, Mexico. The feasibility study recommended production starting with oxide ores on the Penasco deposit. The whole project, which would develop both oxide and primary zinc-lead-silver-gold ores on the Penasco and Chile Colorado deposits, would have a 17-year mine life and an undiscounted net present value of US$877 million.

Over on the gold board, Barrick Gold rose 63 to $30.65 and quarry Placer Dome 91 to $24.34. Placer advised inaction on the bid to its shareholders last week and said its board would be making a recommendation in time for shareholders to decide before the Barrick bid, 0.7518 of a Barrick share or $20.50 per share, expires on Dec. 20.

The more excitable followers of the gold stocks bid up most of the mid-tiers on the gold index during the period. Agnico Eagle Mines was up 70 to $16.85, Glamis Gold, $1.78 to $26.33, Yamana Gold, 33 to $4.97 and Iamgold, 15 to $6.89.

Centerra Gold fell $1.32 to $22.58 following news that a group of protestors had blocked the road to its Kumtor gold mine in Kyrgyzstan, demanding further compensation from Kumtor for a cyanide spill in 1998.