Broad market rises as golds and base metals heat up

With strong support from the resource sector, the S&P/TSX composite index jumped 90.81 points over the Feb. 4-10 report period to end the week at 8,751.51.

Gold rose US$6.60 in overseas trading to settle at a London morning fix of US$408.35 per oz. on Feb. 10. The gold subgroup marched in step, rising 13.29 points to 218.61.

Canada’s Big 3 all gained ground: Placer Dome jumped $2.04 to $22.99; Barrick Gold climbed $1.20 to $27.59; and Kinross Gold rose 56 at $9.93.

Among mid-tier producers, Glamis Gold climbed $1.40 after announcing a 27% increase in reserves and rosier production forecasts. In 2004, the company expects to produce 265,000 oz., or 15% more than last year, at a total cash cost of US$170-180 per oz., reflecting newfound production from the El Sauzal mine in Mexico and expanded output at the Marigold mine in Nevada.

Golden Star Resources jumped 11% in value, or 83, to $8.09. At the end of the previous period, the company reported record production, revenues and cash flow for 2003, owing to stronger gold prices and increased output from the Bogoso-Prestea mine in Ghana.

Falconbridge stood out in the base metal crowd, springing $3.66 to $34.36, for a 12% gain in value. The company reported a fourfold increase in net earnings, thanks to higher metal prices and record nickel production.

Inmet Mining fared even better than its larger peer, jumping 19% in value, or $3, on news of having pocketed $127.6 million in the final quarter of 2003. Inmet only earned $400,000 in the similar period a year ago, with the difference mainly reflecting a $111- million settlement from the Troilus suit, plus stronger metal prices. Inmet finished the period at $18.60.

By period’s end, the diversified metals and mining subgroup had risen 11.63 points to finish at 221.87. Sherritt International and FNX Mining were the only losers of the bunch, falling 7, to $7.13, and 48, to $7.65, respectively.

Off-index issue Tahera was the nation’s most heavily traded mining issue, rising 5.5 on a volume of about 105 million shares. The Nunavut Impact Review Board has conditionally approved the company’s environmental impact statement for the Jericho diamond deposit, and the report now awaits federal approval.Tahera finished at 48.5.

Other diamond news came from Ashton Mining of Canada and Pure Gold Minerals, which have chosen to end their Slave diamond exploration joint venture. Pure Gold has transferred its 10% stake to Ashton in return for a 1.5% diamond royalty and has granted that company a 1% diamond royalty on its half-owned North James River property in Nunavut. Ashton finished the period at $1.80, up 20, while Pure Gold finished a penny higher, at 12.

Tiomin Resources climbed 4 on news of having obtained written governmental support for its Kwale titanium-sands project in Kenya. The company also entered the final negotiating phase for project financing and expects to begin construction later in the year. Tiomin ended the period at 37.