Freeport’s profits shrivel

The period ended Oct. 19 saw the broad market acclerate its decline of the previous week, with the Dow Jones Industrial Index tumbling 179.56 points to 9,897.62 and the S&P 500 index slipping another 18.61 points to 1,103.23.

Freeport-McMoRan Copper & Gold nosedived US$5.18, or 13%, to US$34.90 as copper prices pulled back sharply and the miner reported smaller-than-expected third-quarter earnings. Quarterly earnings fell to US$17.1 million, or US10 per share, from US$47.4 million a year earlier, while revenue shrank 5% to US$600.6 million. Freeport’s share of quarterly sales fell to 262 million lbs. copper and 350,000 oz. gold from 345 million lbs. and and 763,500 oz., respectively, a year earlier. Grasberg’s huge pit suffered a major landslide in December 2003, and operating and financial results continue to be hampered by efforts to restore safe access to the pit’s higher-grade areas.

Harmony Gold Mining created quite a splash by launching a hostile, all-share takeover bid for fellow South African miner Gold Fields, which is twice Harmony’s size. The offer, which represented a 29% premium on Gold Fields’ shares, requires the cancellation of a merger between Iamgold and Gold Fields’ non-southern African assets. Over the period, Harmony dropped US$1.83 to US$11.53, Gold Fields rose US35 to US$14.30, and Iamgold fell US86 to US$7.44.

The American Stock Exchange made headlines by launching an index called the “Amex Gold Miners Index” under the ticker symbol gdm. The index covers 36 well-traded gold and silver companies with market caps greater than US$100 million. The Amex also began trading options on Southern Peru Copper and Silver Standard Resources.

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