Gold sparks on Barrick news

Buyers overtook sellers over the Nov. 19-25 report period, pushing the Toronto Stock Exchange composite index up 84.95 points to a close of 7,822.34.

Gold producers were not so lucky, as physical prices dragged the sub-group down 0.74 of a point to a close of 225.96. After an initial surge, which coincided with a surprise announcement from Barrick Gold, the yellow metal had, by the morning of Nov. 25, steadily declined to US$391.50 per oz. for a 5-day loss of 92.

On Nov. 21, Barrick announced an end to its 20-year gold hedging policy. Chairman Peter Munk said the strategy was no longer necessary in the current economic climate but noted that the company did not intend immediately to unwind existing contracts. The newfound rationale helped the company overcome the lower gold price and finish the period 16 higher, at $28.16.

Canada’s other majors, Placer Dome and Kinross Gold, went the opposite way, falling 18 and 6, respectively. Placer finished the period at $22.17; Kinross, at $10.91.

Goldcorp rose a dime on news it had acquired two more properties in the Red Lake camp of northern Ontario. The company can earn 60% stakes in the Red Lake North and Adams Lake projects by spending $5 million over four years and investing $1.6 million in Rubicon Minerals, the vendor. The announcement also bumped Rubicon up 16 to $1.73.

Wheaton River Minerals slipped 20 on a volume of 36 million shares, making it the second most active resource issue. The loss comes a week after the release of third-quarter results that showed a profit of US$14 million.

Inco dropped $1.08, to $42.15, as spot nickel traded lower in London markets; it was fixed at US$5.53 per lb. on the morning of Nov. 25. Nickel’s depreciation also worked on Falconbridge, slicing 35 off its share value, but left Sherritt International unblemished at $5.15.

Diversified producer Noranda was luckier, rising two pennies to $16.42. Both nickel and copper, which rose a penny in overseas trading, account for the bulk of Noranda’s operating income.

The rest were mixed: Teck Cominco‘s B-series sank $1.04 to $16.42; Aur Resources rose three pennies to $5.23; Ivanhoe Mines dropped 90 to $11.45; LionOre Mining dropped 65 to $6.90; and Cameco rose $2.40 to $60.25.

Queenstake Resources was the most active issue, slipping 9 on a volume of 69 million shares. The activity comes on news the company lost $7.1 million in the third quarter as interest expenses and unusual items bit into operating income of $3.1 million.

The highest percentage gainer was Northway Explorations, which rose 63, or 95.4% of value. The company has hired Jones Gable & Co. to arrange a private placement of 5.5 million units priced at 54 apiece. A unit consists of a share and a warrant that can be exercised six months after the deal’s close, at 66.

Goldstake Exploration was also a big percentage gainer, rising 53.8% in value, or 7, on news it had intersected 438 grams gold per tonne over 0.44 metre at the Transpacific property, north of the Kerr Addison mine in Ontario. The junior can earn a 60% stake in the project by spending $1.5 million over four years.