Base metals diverge, golds plunge deeper

The Toronto Stock Exchange composite index plunged 80.77 points over the Feb. 26-Mar. 4 report period to finish the week at 6,422.33.

On March 5, gold settled at a London morning fix of US$354.50 per oz. for a gain of US$1.95 over the five trading days. Nevertheless, Canada’s two major producers slid: Barrick Gold by 37, to $19.99; and Placer Dome by 15, to $13.74, on a volume of 13.9 million shares, making it the most active issue.

Also down was Kinross Gold, which slipped 37 to $10.50. The fledging major announced a fourth-quarter loss of US$13 million and a 2002 loss of US$31 million; however, both periods are better than the comparable ones of a year earlier.

Cambior, off a nickel at $1.80, reported a breakdown in the production hoist at its Doyon mine, near Rouyn-Noranda, Que. Repairs may take as long as six weeks to complete, during which miners will use a service hoist and decline to haul ore to surface. Cambior also announced the receipt of $17.1 million in proceeds from the exercising of 11.2 million warrants that were scheduled to expire. Cambior now has 170.3 million shares outstanding.

Wheaton River Resources slipped 2 despite closing a $333-million private placement to buy Rio Tinto‘s Peaks gold mine in Australia and its quarter-stake in the Bajo de la Alumbrera copper-gold mine in Argentina. The operations are expected to increase Wheaton River’s annual production to 458,000 oz. gold-equivalent while reducing its cash costs to US$124 per gold-equivalent ounce. Wheaton ended the period at $1.27.

Inco was the most active base metal issue, sinking $2.81 to $29.64 on a volume of 9.7 million shares. The major plans to issue US$461 million worth of convertible debentures (or US$500 million if an over-allotment options are exercised in full) in order to repay existing ones that mature in 2004 or 2006. The new debentures will be sold in two batches, with the first set having a maturity date of 2023 and the second, 2052.

The rest of the base metals were a mixed bag: Falconbridge rose 29 to $17.64; Noranda, which said it will issue $150 million worth of preferred shares, fell 92 to $12.64; Aur Resources gained 15 to $3.85; Cameco dropped 84 to $34.50; Sheritt International added 13 to $4.75; Teck Cominco B-series slipped 18 to $11.57; LionOre Mining crawled 2 ahead to $5.69; and Ivanhoe Mining fell 31 to $3.14. Overall, the diversified metals and mining sub-index fell 5.5 points to finish the report period at 126.05.

Northern Orion was again the most active junior, rising 3 to 18 on a volume of 13.5 million shares. In early February, the company inked a deal with BHP Billiton to buy the major’s stake in the Agua Rica copper-gold project in Argentina and thus become the sole owner. Resources there are pegged at 750 million tonnes grading 0.99% copper-equivalent.