TSX plummets from high

Slumping energy and metal stocks dragged the Toronto Stock Exchange down nearly 5% to 11,519.49 points during the Feb. 7-13 report period. Profit-taking and fund-selling helped gold drop US$20.45 per oz. lower to US$549.30 in the afternoon in London on Feb. 13; it shed another US$9.60 to US$539.70 a day later. The TSX Gold Index responded by falling 10% to 260.27. Likewise, the base metal miners dropped nearly 10% to 405 even, with nickel the lone gainer.

Bema Gold saw the most action, with just shy of 50 million shares sliding 12% to $4.35. Indicated resources at the 75%-owned Kupol project in Russia’s Far East were recently boosted by 15% to 7.4 million tonnes of 20.2 grams gold and 244.2 grams silver per tonne, based on a cutoff grade of 6 grams gold.

The Gold Index’s biggest losers were Eldorado Gold and Golden Star Resources, which each fell by 15%. Eldorado recently raised $186.3 million by selling 34.5 million shares at $5.40 apiece. The proceeds will go toward the acquisition of advanced gold projects in China, and development and exploration in Turkey and Brazil. Golden Star fell into the red during the last three months of 2005, posting a US$3.9-million net loss, mostly owing to a US$3.4-million writedown of deferred stripping costs related to a revised mining plan for the Plant-North pit at the Bogoso-Prestea mine in Ghana. Eldorado tumbled 84 to $4.70, while Golden Star slid 65 to $3.74.

Off-index, Chariot Resources raced 33 million shares to an unchanged end of 42.5; the company’s warrants managed to gain half a penny to 12. Rio Tinto subsidiary QIT-Fer et Titane recently sold 25.6 million shares and 11.6 million warrants. The titanium dioxide producer retains 1.2 million warrants, each good for a Chariot share at 35 per share until Dec. 22. If exercised, the warrants represent a 0.7% stake in Chariot on a fully diluted basis.

Eurozinc Mining remained in the thick of the action, with nearly 35 million shares falling 39 to $1.40. Denver, Colo.-based Resource Capital Fund recently sold some 71.4 million shares at $1.40 apiece. The shares went to an underwriting group, which plans a prospectus offering in Canada and private placement in the United States. The fund retains an 18.32% stake in Eurozinc.

Sticking with warrants, those of Avnel Gold shot up 12, or 80%, to 27, while the common shares declined 7 to 90 in thin action. Late last year, privately owned Elliott Associates acquired around 2.8 million Avnel shares at $1.00 per share in an off-market deal. The Delaware-based hedge fund now holds a 52.1% stake in the small-scale Malian gold producer.

Looking at the major base metal miners, Alcan finished $5.35 lighter at $51.85 on around 14 million shares. The aluminum giant ended the fourth quarter with a wider net loss of US$361 million, or US98 a share, thanks to a restructuring charge and one-time writedowns.

Meanwhile, higher metal prices saw Falconbridge‘s earnings jump by 67% to US$872 million in 2005. Earnings in the final three months of the year came to US$280 million, up from US$143 million a year earlier. Falco shed $2.85 to $35.35.

Inco widened its fourth-quarter earnings to US$235 million, bringing full-year 2005 profit to a record US$836 million. Inco’s extended takeover bid for Falco expires on Feb. 28. The deal still needs to be approved by the U.S. Department of Justice and the European Commission. The nickel giant finished $5.15 cheaper at $53.20.