Base metals survive sinking composite index

The Toronto Stock Exchange performed dismally during the report period Feb. 7-13, with the TSE 300 composite index sliding 359.27 points in five trading days and finishing at 8,942.13. The banks and the industrial products sub-group led the market downward, with the “old-economy” base metals providing one of the few bright spots.

The metals and minerals sub-group was only 54.58 points better after five sessions, closing at 4,060.92, but a 1.4% gain against the flow of the market had to count as a victory.

The golds, hit again by falling prices, slid 84.46 points to finish the report period at 3,884.85. The flags went down at US$260.90 per oz. in the morning bullion dealers’ session, leaving the yellow metal with a loss of US$2 for the five trading days.

In step with the yellow metal, Barrick Gold sank 39 to $21.75 and Placer Dome fell 59 to $12.26. Surprisingly, Kinross Gold, though the smallest of the three, edged ahead a penny to 68.

The bell tolled for McWatters Mining on Valentine’s Day, as the junior was forced to suspend all mining at its Sigma-Lamaque complex in Val d’Or, Que. The company will also review the viability of its nearby Kiena underground gold mine. McWatters closed down a penny over the week to 19, but at presstime the stock remained halted following the suspension announcement. Standard & Poor’s responded by lowering McWatters’ corporate credit, senior-secured and senior-unsecured debt ratings to CCC from B.

The highlight of the diamond sector was Namibian Minerals, which denounced claims it was in talks to avoid liquidation. An accident with the NamSol seabed crawler earlier this year left the company short on cash; however, a recently arranged US$10.2-million equity financing is expected to suffice for immediate demands. Namibian closed down 2 at $2.28.

Among base metal producers, Noranda climbed 55 to $16.90, adding to $1.13 gained in the previous period. After releasing stellar financial results, the major announced it was seeking regulatory approval to issue US$800 million in new debt securities, including US$300 million in 10-year notes. The euphoria carried over to Falconbridge, a 55%-owned subsidiary of Noranda, which rose 59 to $17.49.

Other major base metal producers were mixed: Inco climbed 52 to $25.82; Sheritt International rose 23 to $4.47; Cominco slipped 10 to $24.14; and Teck B-series descended 23 to $13.77.

Mid-tier producers were likewise mixed, with Breakwater Resources falling 6 to $1.30 and First Quantum Minerals rising 17 to $3.73. Also down was Boliden, off 26 at $1.07, and LionOre Mining, off 2 at $1.38.

Southern Africa Minerals added 8 to close at 20 on relatively light volume. The junior has not released any news since October but is in a joint venture with affiliate Band-Ore Resources to explore dyke structures at Keglo Bay in northern Quebec, near Twin Mining‘s Torngat diamond showing.