Falling metals weigh on miners

Sagging metal prices sent the mining indices south during the holiday-shortened Sept. 1-7 report period. The gold index shed 3.26 points to end at 220.52, as the yellow metal lost US$9.55 per oz. to finish at US$398.10 in the afternoon in London on Sept. 7. The diversified miners chipped in with a 3.26-point loss to 220.52, with lead the only advancer. In the end, the S&P TSX composite index was 40.75 points lighter at 8,369.37.

Goldcorp CEO Robert McEwen made news during the period, asking his company’s board to begin the search for his successor. McEwen, who has been at Goldcorp’s helm for 18 years, cites the rigors of governmental and regulatory compliance as a factor in his decision. McEwen says the company needs a new leader with different skills to continue its corporate evolution. He faced some heat late last year after the company sold off its gold hoard, while maintaining that gold prices were going higher; soon thereafter, McEwen personally sold some 5.5 million Goldcorp shares, or about half his holdings. The issue fell 87, or 5%, to $15.70.

Nevsun Resources saw its shares nearly halved to $2.15 after it reported that the Eritrean Ministry of Mines has instructed it and several other companies to cease work in the East African nation; no reason was given. The order affects Nevsun’s Bisha copper-gold project. Nevsun says it is seeking clarification from the government.

Shares in Ashton Mining plunged 18, or about 14%, to $1.11, after reporting lacklustre results from bulk sampling of the Renard 65 kimberlite on the Foxtrot property in Quebec. A 122.5-tonne sample there yielded just 0.22 carat per tonne. So far, some 159 tonnes of material from Renard 65 has yielded 0.26 carat per tonne — the lowest estimated diamond content of the recently bulk-sampled Renard 2, 3, 4 and 65 cluster of kimberlite bodies.

Kinross Gold saw more than 12 million shares make their way 53 lower to $7.50. According to media reports, mining giant Rio Tinto wants to sell its 51% stake in the Morro do Ouro gold mine, near Brasilia; Kinross owns the owns the other 49%, and tipped as a buyer.

Turning to the Wheaton River Minerals takeover saga, spurned suitor Coeur d’Alene Mines says it will soldier on with its bid despite Wheaton’s rejection of its renewed but essentially unchanged bid. Wheaton fell 19 to $3.39.

UEX got a confidence boost after Cameco said it would subscribe to 2 million of its shares at $1 apiece, boosting a previously announced $5-million private placement to nearly $7 million. The subscription will maintain Cameco’s stake in UEX at 26%. Proceeds will fund exploration in the Athabasca basin in northern Saskatchewan. UEX shed 2 pennies to finish at $1.49.

Meanwhile, Cameco says a strike by 200 hourly workers at the Port Hope conversion facility in Ontario has delayed a shipment of uranium hexafluoride. The delay is not expected to have a financial impact. The workers have been on strike since July 28; so far, the facility is about 1,000 tonnes behind its 2004 production target of 12,500 tonnes uranium. Still, Cameco says it is meeting its sale requirements. An end to the strike is not yet seen. Cameco managed to scrape together 6 to settle at $88.81.