Gold prices move up to new range

Gold bugs enjoyed an invigorating rally in the yellow metal over the May 16-22 report period, as the London gold price broke out of a long-held, sub-US$270-per-oz. range to spend a few hours above US$290 per oz.

As a result, Canada’s gold majors all had a strong week: Barrick Gold rose $1.53 to $28.03; Placer Dome was up 85 to $18.10; Franco-Nevada Mining gained $2 to $21; Kinross Gold shot up 44 to $1.39; Cambior was up 9 to 72; TVX Gold rose 29 to $1.28.

Gold’s rise helped the mid-size market darlings even more: Goldcorp gained $2.05 to $15.70; Meridian Gold popped up $1.35 to $12.85; and Agnico-Eagle Mines advanced $1.05 to $13.81.

Noranda, which rose $1.13 to $17.93, showed that getting out of the gold business altogether also pays: it announced it had realized a gain of $45 million from the sale of its 4% stake in Newmont Mining to Credit Suisse First Boston for $246 million. Noranda had originally acquired its Newmont shareholding via the latter’s merger with Battle Mountain Gold, a company in which Noranda had held a 28.4% interest.

Noranda subsidiary Falconbridge was blindsided during the period by Boliden‘s alleged reneging on its decision to sell Falco its two Chilean copper assets. Debt-burdened Boliden said it may issue new shares to finance operations at the Lomas Bayas mine and the adjacent Fortuna de Cobre property. Over the week, Falco rose 55 to $18.10, while Boliden was up 2 to 89.

Among Canada’s remaining base metal producers: Teck‘s B shares advanced $1.27 to $16.35; Cominco was up $2.21 to $35.15; Breakwater Resources rose 5 to $1.35; Inco climbed $1.35 to reach $30.50; and Sherritt International rose 12 to $4.40.

Copper producer First Quantum Minerals rose 15 to $4 upon signing a letter of intent to acquire Phelps Dodge’s 80% interest in the Kansanshi copper-gold deposit in Zambia’s Northwestern province. The deposit has an open-pit resource of 267 million tonnes grading 1.28% copper and 0.16 gram gold per tonne. The remaining 20% of the venerable Kansanshi operation is held by Zambian Consolidated Copper Mines.

Geomaque Exploration jumped 8 to 41 as it announced mixed financial results for the first quarter. Losses rang in at US$1.1 million, but cash provided by operating activities jumped 300%, compared with the corresponding period a year ago. Better results are anticipated ahead, owing to the startup of the Vueltas del Rio gold mine, which poured its first gold bar in early March.

Tan Range Explorations rose 6 to 55 as it announced the discovery of high-grade, near-surface gold at its Luhala project in northern Tanzania. The Shilalo South prospect, 1.2 km south of the near-surface Kisunge Hill zone, yielded 29.5 grams gold per tonne over 1 metre. Drilling continues.

Partners Thundermin Resources and Queenston Mining tabled a positive feasibility study for their Duck Pond copper-zinc project in central Newfoundland. Curiously, Thundermin slipped 4 to 22, whereas Queenston rose 7 to 48.