Cominco, Aur, Teck drop on deal

The Toronto Stock Exchange 300 index rose 296.49 points during he report period March 1-7 to end the week at 9,425.48. Metal producers were mixed, with the TSE gold and precious minerals sub-group rising 123.28 points to 4,246.04 and the metals and minerals sub-index falling 162.13 points to 3,328.26.

Palladium prices fell sharply over the period, slipping US$35 to US$675 per oz. on the morning of March 8; platinum fared better, dropping only $2 to US$475 per oz. Newswire reports confirmed that Russian President Vladimir Putin has finally signed a decree granting export licences for platinum group metals.

Gold prices were below US$290 per oz. for most of the report period, though they recovered to end the week down only $1 at US$292.75 per oz. Canada’s major gold producers were mixed: Barrick Gold rose $1.25 to $24.90; Placer Dome climbed 90 to $13.50; Franco-Nevada Mining shed 80 to hit $16; Kinross Gold gained 17 to $2.45; TVX Gold edged up 10 to $1.20; and Cambior fell 18 to $1.59.

Among the base metal producers, the biggest story of the week was Aur Resources‘ preliminary agreement with Cominco and Teck to buy, for US$262-million, their collective 76.5% interest in the Quebrada Blanca open-pit copper mine in northern Chile. This year, the mine is expected to produce 75,000 tonnes of copper at a cash cost of US$0.51 per lb., boosting Aur’s anticipated production in 2000 to more than 195 million lbs. from 69 million lbs. The deal was announced moments after Aur officially abandoned its attempted hostile takeover of Cambior.

Over the week, Aur fell 13 to $1.85, Teck’s B shares slipped $1 to $10 and Cominco dropped $1.65 to $19.35.

Strengthening demand and slimmer warehouse stocks pushed nickel up 3 to US$4.71 per lb. On the opposite hand, a 2.2% increase in copper stocks chipped 2 off that metal’s price, which was US77 per lb. on the morning of March 8.

The week was hard on Canada’s remaining majors: Noranda fell 70 to $14.40; Rio Algom lost $1.10 to hit $14.50; Boliden dropped 66 to $2.60; Inco was off $1.15 to $24.20; Falconbridge fell $1.95 to $18.75; and Sherritt International dropped 10 to hit $3.45. Only zinc miner Breakwater Resources bucked the trend, rising 25 to $3.

Among the juniors, Freewest Resources rose 48 to 80 on news of encouraging results from induced-polarization surveys at the jointly owned Tyko Lake and Folson Lake platinum group metals properties in northern Ontario. The 200-sq.-metre chargeability anomaly outlined at the former property coincides with a showing in hornblendite that runs up to 3.82% nickel, 1% copper and 2.43 grams combined platinum, palladium and gold.

Montreal-listed South-Malartic Exploration climbed 32 to $1. The company has arranged a private placement worth $1 million and plans to use the proceeds to continue exploration at its Montauban and Croinor projects in Quebec.