Central bank sales depress gold yet again

Central bank selling has once again rocked gold markets, causing the yellow metal to slip $8.10 during the Dec. 1-7 report period and land at US$283.30 per oz. on the London morning fix of Dec. 8.

On Dec. 6, the Netherlands announced it would sell 300 tonnes of gold over the next five years, with a third of that to be sold in 2000. Two days later, Switzerland’s upper house of parliament unanimously approved legislation to allow its central bank to begin selling 1,300 tonnes as early as next spring. Both announcements followed the third of five planned auctions by the Bank of England on Nov. 29, involving 804,000 oz. The remaining two sales will occur on Jan. 25 and March 21, 2000.

The news also wreaked havoc on the TSE’s gold and precious metals sub-group, pushing it 65.84 points lower to 5,126.59. Canada’s major producers were mixed: Barrick Gold rose 50 to $27; Placer Dome slipped 5 to $16.70; and Kinross Gold fell 18 to $2.87.

Cambior regained investor confidence by reporting its intention to sell its Carlota open-pit project in Arizona to repay debt. As part of its restructuring effort, Cambior is considering the sale of other gold and base metal assets, including its half-interest in the Niobec niobium project in Quebec, where a feasibility study was recently tabled. Cambior ended the period up 43 to $2.03.

Diamond producer Namibian Minerals edged ahead 20 to $8.20. The company has begun developing its second ocean mining platform, having raised US$25 million in debt financing.

The TSE’s metals and minerals sub-group soared 200.75 points to 4,006.31. Following suit was Inco, which climbed $1.30 to $28.30 after reaching a tentative agreement with locked-out employees at its Manitoba division. Surprisingly, nickel benefitted from the news, rising 4 to US$3.65, as did Falconbridge, which gained $1.05 to close at $23.80.

William James, a fixture in the Toronto mining scene, announced he will step down as Inmet Mining’s president and CEO. He will be replaced by Richard Ross, currently serving his fourth year as Inmet’s chief financial officer, and who, in turn, will be succeeded as CFO by Scott Oen, Inmet’s vice-president and treasurer. James will replace James Tory as Inmet’s Chairman, though the latter will remain a director. Inmet rose 25 over the period to $2.60.

Standing out among juniors, Scorpion Minerals jumped 54 to $1.42 on news that it had obtained a listing on the Frankfurt Stock Exchange. Also stronger was Sudbury Contact Mines, which climbed 20 to $1.35 after announcing encouraging metallurgical results from its Tonkin Springs gold project in central Nevada. A 19,000-ft. drill program is under way.

Montreal-listed Boreal Exploration rose 16 to 43. The junior intends to merge with a Quebec-based software company and unload its mining assets on a subsidiary that eventually will be listed as a separate company.

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