Broad market slips as gold miners rise

The Standard & Poor’s/TSX composite index began the Aug. 20-26 report period on a high note, only to succumb to bearish mentality by its close. The result was a value reduction of 32.09 points, as the benchmark finished the week at 7,442.82.

London gold bugs suffered similar attacks but had overcome their queasiness by the morning of Aug. 27 to fix the yellow metal at US$364.30 per oz., for an overall gain of US$2.10.

McWatters Mining was the most active resource issue, climbing a penny on a volume of 15.8 million shares. The company announced a second-quarter net loss of $3.5 million, while expressing confidence that operational improvements at the Sigma open-pit mine in Que. will enable it to meet production targets for 2003 and beyond.

Also up on heavy trading was Queenstake Resources, which recently beefed up its management team in order to complete the acquisition of the Jerritt Canyon mine from Meridian Gold. Queenstake, which now expects to produce 300,000 oz. in 2003, rose 23 to 78 as roughly 12 million shares changed hands.

Eldorado Gold went the opposite way on news it had closed a $77.5-million private placement. The junior miner issued 25 million units at $3.10 apiece to raise enough funds to construct the Kisladag open-pit gold mine in Turkey.

Also down was Bema Gold, which fell 14 to $2.85. The junior miner recently signed a bought deal with a syndicate of underwriters, who will buy 20 million shares at $3 apiece, resulting in gross proceeds of $60 million for Bema. An additional 3 million shares can be purchased for two days after the deal’s closing. Proceeds are earmarked for Bema’s Kupol project in Russia.

Among the majors, Kinross Gold was the most active, rising 13 to $9.70 on a volume of 15 million shares. Barrick Gold climbed 58 to $26.93 as 10.6 million shares changed hands, whereas Placer Dome slipped 19 to $18.35 on a volume of just under 10 million shares.

Ivanhoe Mines took centre-stage in the base metal sector, jumping 45 to $5.48 as 8.3 million shares changed hands. The company reported that AMEC E&C Services had discovered an error in its Oyu Tolgoi database, which, upon correction, adds 4% more copper and 8% more gold to the Mongolian project’s Far North deposit.

Dynatec, up 14 at 94, inked a joint-venture agreement with U.S.-based Phelps Dodge to develop the Ambatovy nickel-laterite project in Madagascar. The deposit contains an estimated 210 million tons running 1.1% nickel and 0.1% cobalt. Under the deal, Dynatec will act as operator and can take a 53% stake by funding around US$20 million worth of work, including a bankable feasibility study.

Orezone Resources was the most active junior, rising a nickel on a volume of roughly 7 million shares. By presstime, the junior had risen another nickel, putting its issue at 80, though neither that nor the period’s gains came on any news.