Big gains for golds over holiday

The year-end recovery of the gold price proved to be a real jolt in the gold sector, while the broader market moved little. The TSX Composite Index gained only 0.2%, rising 26.89 points to 11,272.26 over the three trading days of Dec. 28-30, but the TSX gold index shot up 3.2%, or 7.84 points, to 251.75.

Post-Christmas bullion prices started with a London fix of US$509.15 on Dec. 28 — a jump of US$5.55 from the Dec. 23 fix — and finished at US$513 per oz. at year-end. (By presstime gold prices had passed US$530.)

There were no less than seven of the TSX gold constituents that touched highs for 2005 in the three trading days. Kinross Gold was up 41 at $10.74 having traded at $11; Goldcorp rose $1.52 to $25.90, hitting $26.58. Among the mid-tiers, Agnico-Eagle Mines touched $23.13 before finishing $1.05 higher at $23.02; Glamis Gold traded at $32.42, closing $1.10 higher at $31.97; Eldorado Gold rose 8 to $5.69, stopping by $5.95; Yamana Gold was up 63 at $7.70, with a high of $7.88; and Southwestern Resources hit $14 before settling back to $13.51 for a gain of $1.21.

The previous week’s friendly deal between Barrick Gold and Placer Dome shared some of the sunshine in the gold sector, although the combined hedge book that will emerge may have dampened the stocks’ appeal in a sector where enthusiasm was running largely on higher prices. Barrick finished at $32.41, up 76, while Placer closed 51 higher at $26.62. Apart from the two big boys, Golden Star Resources, which moved up 27 to $3.09, was the volume leader on the gold index, with 6.1 million shares changing hands.

Off the index, two juniors with development projects saw strong upward moves. St Andrew Goldfields, with 7.2 million shares moving, was up 3.5 at 15.5 having reached a definitive agreement with Kinross Gold on the sale of the Aquarius platinum project for 100 million shares and 25 million warrants. The deal gives Kinross a 14% interest in St Andrew. On the junior boards, the biggest percentage gain belonged to Moneta Porcupine Mines, which was up 4.5 at 16.5 on light trading, possibly reflecting its deals with St Andrew, and the cash that would be available if Kinross exercises the warrants.

Miramar Mining gained 56 to close at $2.92, a gain of 24%, and touched a year’s high price of $2.99. Newmont Mining recently bought an 18.5-million share position in Miramar, with another 18.5 million warrants, giving it a 9% interest in the company.

As a cheque-casher, Royal Gold was placed to benefit from the rise in gold prices too, popping up $1.12 to $40.46. Similarly, there were big gains in the most price-sensitive developers: Gabriel Resources rose 26 to $2.84 and Vista Gold added 37 to finish at $5.90.

Among the explorers, the big mover was Linear Gold, which rose $1.20 to $4.77. The most recent news on its Ixhuatan gold-silver exploration project came late in November.

Compared to the golds, the base metal sector was relaxed. The TSX metals and mining index rose a fraction of a point to 388.08 during the reporting period, its gain of 0.1% lagging the broader market. Still, there were some new highs in that sector, too, feeding on high commodity prices. Copper producer Aur Resources rose 9 to $11.78, after touching a year-long high of $11.84, as copper finished out the year at US$4,584.50 per tonne (US$2.08 per lb.). Teck Cominco A-series shares were $2 higher at $65, while B-series shares made a yearly high of $63.60 on their way to a close of $62.05, up $1.70. With uranium prices now at $36.25, their highest since early 1980, Cameco shares traded as high as $74.99 before finishing $1.63 higher at $73.79.