Broad market stumbles through holiday

Causing more sighs than cheers, the Toronto Stock Exchange 300 index sank 116.32 points over the holiday-shortened period Aug. 29-Sept. 4. The broad market ended the period at 7,462.03, for a loss of 1.5%.

Gold dropped $1.15 to land at a London morning fix of US$271.70 per oz. on Sept. 5. Platinum, palladium and silver were devalued as well.

The golds fared slightly better than the broad market, slipping 62.61 points, or 1.3%, to 4,730.64. Barrick Gold was off 50 at $24.35; Placer Dome was off 27 at $16.87.

Following the market close on Sept. 5, Franco-Nevada Mining and Kinross Gold announced that they had agreed to convert their holdings of Echo Bay Mines capital securities into common shares. Under the plan, which still requires the approval of Echo Bay shareholders, Franco would own 49.5% and Kinross 11.4% of Echo Bay. At the Sept. 5 close, Franco was up 95 at $20.75, Kinross was 8 higher at $1.35, and Echo Bay added 5 to finish at $1.48.

Bema Gold was among the few junior producers to report news, announcing that it soon expects to fire up the underground Julietta gold-silver project in far-eastern Russia. The startup will replace the Refugio mine in Chile, where operations were halted a few months back. Bema closed down 1 at 48.

Palladium issues were mixed, with North American Palladium falling 15 to $10.10 and SouthernEra Resources rising 10 to $2.95. The former began the period by celebrating the official expansion of its Lac des les mine in northwestern Ontario. Across the Atlantic, in South Africa, SouthernEra reports its Messina mine has reached a tentative marketing agreement with an automotive company. Also, British giant Rio Tinto has invested another $9.4 million in SouthernEra by subscribing for 2.5 million shares at $3.75 apiece, thereby increasing its stake to 14.5%.

The metals and minerals sub-group was down 20.69 points to finish the report period at 4,125.29. Nickel was the biggest loser, crashing 15 to a London morning fix of US$2.39 per lb. as copper shed US2. Lead and zinc remained unchanged.

Inco expected to have wrapped up discussions with the Newfoundland government over the stalled Voisey’s Bay deposit in Labrador, but all it could report was that the talks were continuing. The two sides returned to the negotiation table in mid-June. Inco slipped 19 to $25.95.

Activity among other base metal producers was just as dreary: Falconbridge fell 8 to $16.60; Sherritt International dropped 7 to $4.83; Noranda, which reduced September prices for aluminum ingot and billet by US2 per lb., sank 26 to $15.91; and Teck-Cominco slipped 5 to $11.95.