Global market shock hits TSE

The report period July 17-23 saw further steep declines on stock markets worldwide, and the Toronto Stock Exchange was no exception. The TSX Composite index lost 534.58 points, or about 8% of value, and closed at 6,161.08.

Mining issues were among the heaviest losers, with the TSX Golds falling 25.08 points to 158.44 and the TSX Metals and Mining index off 14.10 points to 115.31. The slides represented 13.7% of value in the golds and 10.9% of value in the base metals.

Gold bullion reached US$324 per oz. in the London fix on July 22, but heavy selling over the next two days brought it down to US$313.60 per oz. by the July 24 morning session, a dip of US$4.15 from the previous week. The other precious metals were also lower, with silver off US14 at US$4.86 per oz., platinum down US$6 at US$520 per oz., and palladium down US$4 at US$320 per oz.

Both the big gold miners were heavily traded, with Placer Dome off $2.31 at $14.18 and Barrick Gold off $4.34 at $22.85. The biggest of the mid-tier miners, Kinross Gold, was down 64 at $2.73, while its merger-mates also slid — TVX Gold by $4.45 to $17.70 and Echo Bay Mines by 36 to $1.44.

Two other heavily traded golds were Bema Gold, which fell 21 to $1.85 on a volume of 5.4 million shares, and Goldcorp, which was down $1.68 to $13.62 with 4.4 million shares riding the tape.

Elsewhere in the middle tier, Glamis Gold was off $2.35 at $11.45, Meridian Gold fell $3.43 to $22.27, and Agnico-Eagle Mines plunged $2.90 to end the period at $18.85.

Misery was widespread among the junior precious-metal producers; as a sampling, Aurizon Mines was chopped 44, closing at $1.24, River Gold dropped 48 to $2.60, and Golden Star Resources slumped 52 to close at $1.63. Silver producers were, if anything, whacked even harder. Pan American Silver lost $3.08, closing at $10.65, while Wheaton River Mines sank 41 to $1.13.

Base metal prices were weaker, too, with nickel taking a US40 hit to finish the period at US$2.97 per lb. Copper fell US6 to US68 per lb., and zinc was off US3 at US34 per lb.

Market woes were evidently spurring fears of another economic slowdown that might hurt the industrial metals. That translated into falls in TSE base metal shares as well. Inco, with 7.9 million shares traded, was the most active, and fell $3.45 to close at $26.40. The two other major nickel producers also slumped, with Falconbridge off $1.45 at $16 and Sherritt International off 33 at $4.70.

Also heavily traded, with 3.3 million B-series shares changing hands, Teck Cominco took a 15% hit, closing $1.91 lower at $10.25. Another body blow was dealt to Aur Resources, which was down 55, finishing the period at $3.65.

Moydow Mines International fell a nickel to 62 as it raised $500,000 in a share offering and extended the deadline for Newmont regarding the future of the Ntotoroso gold project in Ghana. The major now has until mid-September to decide if the project warrants a stand-alone mill or should be incorporated into a larger project involving its adjacent Sefwi gold property.