Combination fells TSX

A double-whammy of looming interest rate hikes and a narrower trade surplus sent Toronto stocks 54.69 points lower to 10,163.03 over the July 12-18 report period. After some early resistance, the gold index succumbed to drop 9.71 points and end at a 5-week low of 190.83.

Bema Gold ranked as the nation’s most-traded gold miner, with more than 11.3 million shares finding their way 13 lower to $2.69. The mid-tier producer failed to hang on to earlier gains made on the back of the discovery of a new vein at its 75%-owned Kupol project in Russia. Ongoing drilling has also extended known zones.

Bolivar Gold advanced 16 to $2.87 on a heavier-than-normal 9.4 million shares. The company recently diluted Corporacion Venezolana de Guayana’s 30% stake in the Choco 4 and 10 properties in Venezuela to a 5% non-participating interest by paying a total of US$6 million.

Canada’s big three gold producers were lower across the board, as the yellow metal yo-yoed itself US$3.30 per oz. south to US$420.90 per oz. Kinross Gold led the way with a 52, or 6.7%, drop to $7.22; Barrick Gold was next, down $1.65, or 5.4%, to $28.67; and Placer Dome brought up the rear with a 92, or 4.8%, drop to $18.30. Kinross’ revised financial filings have yet to surface, while workers at Placer’s Zaldivar copper mine in Chile returned to work after a week on strike.

In the end, UEX stole the show, rocketing $1.05, or 58.3%, to $2.85 on just shy of 18 million shares. Drilling by UEX and French partner Cogema has returned some spectacular grades from the Shea Creek uranium project in Saskatchewan’s western Athabasca Basin. Cameco holds a 24% interest in UEX, and advanced $2.23 to $57.25; Pioneer Metals holds less than 2%, but rose 20% to 27. Cameco also recently agreed to take up to a 60% stake in TSX Venture Exchange-listed Uravan Minerals’ Boomerang uranium prospect in the Northwest Territories in return for funding up to $10 million worth of exploration.

Other uranium miners heating up were: Australian-based Paladin Resources, up nearly 11% to $1.32; International Uranium, plus 10% to $6; and Southern Cross Resources, which gained 8% to make $1 even. Southern Cross recently agreed to merge with South Africa’s Aflease Gold and Uranium Resources to beget SXR Uranium One.

The diversified metals & mining index dragged itself out of the red with a late surge to finish 4.12 points better at 317.13. The move was spurred by an Australian newspaper report that said Xstrata was sizing up nickel miner Inco for a takeover. Xstrata was recently trumped by BHP Billiton in a bid for Australia’s WMC Resources. Inco climbed $1.52 to $50.89.

Diversified miner Teck Cominco rebounded to finish 58 higher at $46.50. Unionized workers at the company’s Trail smelting operation in B.C. are walking the picket lines after contract talks failed on monetary issues. Teck says it will shut the smelter down during the strike, and will seek to offset losses by selling electricity form the Waneta hydroelectric dam on the nearby Pend Oreille River; the dam normally powers the smelter.