Golds picking up in quiet market

The report period ended May 1 was a quiet one for the Toronto Stock Exchange, with the TSE 300 composite index up fractionally at 7,946.33 points for a gain of 54.66 points, or 0.7% of value.

What was noteworthy was a strong showing by the gold and precious minerals group, which was nearing its 52-week high on a gain of 195.57 points. The group index closed at 4,738.26, only 43 points short of its year-old high of 4,781.36 (coincidentally also set in the first week of May). The golds moved despite sluggishness in the precious metal market, where the yellow metal rose only US$1.05 over the report period, to finish at US$265 per oz. in the London bullion dealers’ morning session. The platinum group metals managed to put a brake on their downward slide, with platinum off only US$3 over the five trading days at US$603 per oz., and palladium down US$40 at US$670 per oz. — better, at least, than its US$55 tumble the week before.

Placer Dome was $1.12 higher at $15.97 and Barrick Gold added $1.55 to finish at $25.90, but again the mid-caps were the bigger beneficiaries of the bounce in the gold issues. Agnico-Eagle Mines popped up $1.07 to close at $11.92, Meridian Gold was $1.05 higher at $12.95, Glamis Gold rose 15 to $3.25, and Goldcorp, at $13, was 20 higher.

Palladium producer North American Palladium was one of the few losers on the index, sliding 55 to $13.25 in tandem with prices. Gold bugs also avoided Franco-Nevada Mining, whose announcement of record earnings for the fiscal year ended March 31 earned it a close of $18.25, down 1.

Base metal prices were a little firmer, with nickel up US15 at US$3.03 and copper up US1 at US77 per lb. The market appears to be digesting recent straws in the wind, including a U.S. National Association of Production Managers survey that showed — wait for it — less pessimism than last month and some encouragement from a meeting of G7 finance ministers, with the consensus being that growth may resume as early as the last quarter of 2001. The TSE metals and minerals group saw a 54.30-point increase in its index, which closed at 4,703.93 and touched a 52-week high of 4,757.38 in intra-day trading on April 27. The biggest news of the week in the base metals sector was hardly a shock: Teck‘s friendly merger agreement with subsidiary Cominco, which will offer $6 plus 1.8 Teck B shares to bring Cominco into a company that will call itself Teck Cominco.

The market immediately saw the merger as a sweet deal for Cominco shareholders, and bid up the price to $34.45, a gain of $3.65 over the report period. Teck’s B series shares, in contrast, were off $1.36 at $16.24. Both were near the top of the most-active list, with 21 million Teck B and 15 million Cominco shares traded.

All three major nickel producers scored big, as Inco added 89 to finish at $28.03, Falconbridge rose 45 to close at $18.15, and even Sherritt International picked up 14 to close at $4.32.