Gold bugs had little time to celebrate during the May 23-29 report period, as the mid-May gold rally quickly fizzled after a few exhilarating days. Coming off an earlier peak exceeding US$290 per oz., gold had slumped to pre-rally levels of US$266.35 per oz. by presstime.
Canada’s gold majors systematically gave back most of the previous week’s gains: Barrick Gold fell $1.63 to $26.40; Placer Dome dropped 80 to $17.30; Franco-Nevada Mining retreated 85 to hit $20.15; Kinross Gold shed 15 to $1.32; and TVX Gold declined 18 to $1.10. Only Cambior had a toe in the positive column, trading up 1 to 73.
The most-watched mid-tier gold producers showed the same pattern: Goldcorp slipped 60 to $15.70; Meridian Gold fell 75 to $12.10; Agnico-Eagle Mines declined $1.06 to $12.75; and Iamgold was off 12 to $2.88 as co-chairmen Mark Nathanson and William Pugliese announced they had sold an aggregate 4.4 million shares.
Some juniors moved on news of deal-making: Etruscan Resources rose 3 to 38 after reaching an agreement with the government of Mali to explore and develop the Djelimangara permit, south of the Sadiola Hill gold mine; and Orezone Resources jumped 2 to 13 on the strength of some enticing high-grade results from its Intiedougou gold property in Burkina Faso.
Metallica Resources fell 4 to 83 prior to releasing results from the final three holes drilled by Noranda in the La Fortuna area of their El Morro copper-gold project in north-central Chile. Although all holes cut wide swaths of mineralization, no. 29 returned a particularly impressive 502 metres of primary sulphides grading 0.63% copper and 0.7 gram gold per tonne. The hole ended in mineralization, meaning mineralization is open to the north and northwest.
The biggest news among Canada’s base metal producers was the souring relationship between Falconbridge and Boliden, resulting from the latter’s backing out of a deal to sell its Lomas Bayas and Fortuna de Cobre assets in Chile. In retaliation, Falco and parent Noranda have launched a US$162-million suit against Boliden alleging a breach of contract. The two had originally planned to buy Boliden’s Chilean asstes together, but Noranda quietly shuffled off its stake to Falco in an announcement hidden deep in the back pages of its recent annual report. The squabbling put a dent in the companies’ shares over the week: Boliden was off 2 to 87; Falco retreated 90 to $18.75; and Noranda tumbled 71 to $17.22.
The rest of Canada’s majors mostly enjoyed gains: Teck‘s B shares advanced 15 to $16.50; Cominco was up 25 to $35.40; Breakwater Resources rose another 11 to $1.46; Inco slipped 55 to reach $29.95; and Sherritt International rose 16 to $5.34.
Among the diamond juniors, Diamond Fields International continued to advance, rising 5 to $1.05 as it announced a buy-back program of up to 1.9% of outstanding shares over the next 12 months.
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