Gold rockets as Hamas founder murdered

Continued geopolitical unrest during the March 17-23 report period saw the price of gold continue to rebound, climbing another US$13.50 to finish at US$416.25 per oz. in the afternoon in London on March 23. The TSX’s gold index responded by jumping nearly 4% to 224.59 points. On March 22, a widely condemned Israeli rocket attack killed Hamas founder Sheikh Ahmed Yassin. The broader market didn’t respond to the news as strongly, as the S&P-TSX Composite Index slid another 127.2 points to 8,474.

Sticking with the bad news, Cumberland Resources said it was “surprised and disappointed” by the magnitude of the preliminary capital cost estimates for its Meadowbank gold project in Nunavut. Completion of a feasibility study of the project will now be delayed by a year. The company’s shares plummeted 56, or nearly 20%, to $2.44, a level not seen in about a year.

Sharing in the misery, Agnico-Eagle Mines slumped 38 to $18.72. On March 18, the company said the Ontario Securities Commission had questions about the disclosure of a rock burst at the company’s LaRonde mine a year ago. No one was injured, no equipment was damaged, and underground and mill operations were not interrupted.

After a promising start, Miramar Mining shares ended 14 lower at $2.25. The company recently posted a net loss of $17.6 million (or 13 a share) for 2003, compared with year-earlier earnings of $600,000 (1 a share). The latest financial results include writedowns and closure and severance costs related to the Con mine in Yellowknife. Underground mining at the mine was terminated at the end of November, as production was significantly lower than expected.

Also making news was Placer Dome, which announced that CEO Jay Taylor will step down at the end of September. Placer’s stock weathered the news and managed to gain $1.15 to hit $23.35. The major’s peers put in more modest gains: Barrick Gold finished 54 higher at $29.83 while Kinross Gold grabbed 17 to make $9.17.

Another personnel move during the report period saw Breakwater Resources‘ chief financial officer, Rene Galipeau, quit to pursue other interests. Vice-President Richard Godfrey will assume the role, while retaining his role as VP finance. Breakwater staged a nice turnaround in the final stanza of 2003, turning a profit of $327,000, compared with a year-earlier loss of $2 million. The improvement came largely as a result of foreign-exchange gains. The zinc miner’s shares ended off 2 at 64.

Turning to some good news, Cambior rose 44, or 13% of value, to $3.90, after reporting that commercial production had begun at its Rosebel mine in Suriname. The milestone was achieved on schedule and budget. Rosebel is expected to produce 245,000 oz. gold in 2004 — about a third of Cambior’s total output.

Inmet Mining‘s shares enjoyed a 57 gain to $19.05. Inmet announced that full production had resumed at the 18%-owned Ok Tedi mine in Papua New Guinea. One of the operation’s two semi-autogenous grinding mills had been shut down since late January.