Golds rebound, base metals sink with broad market

The S&P-TSX composite index traded in a narrow range over the Jan. 15-21 report period, closing down 70.58 points at 6,740.40.

The golds fared better, rising 5.7 points to 193.40. The sub-group got a push from London, which added US$7.35 to an ounce of the yellow metal, fixing it at US$359.25 on the morning of Jan. 22.

Barrick Gold, up 82 at $23.94, said its income taxes for the Pierina mine in Peru have risen by US$141 million. A government audit concluded that US$41 million was owed for 1999 and 2000 and that US$100 million must be paid over the remainder of the mine life. The amount will have little effect on Barrick’s 2002, or future, earnings, but the company plans an appeal.

Kinross Gold announced a delay to its proposed purchase of another 44.17% stake in 54.7%-owned Omolon Gold Mining, owner of the Kubaka mine in Russia. The local governor, whose approval is needed, refuses to sign any related documents until after an upcoming election. Kinross, which climbed 19 over the period to $3.72, still expects the transactions to wrap up by the second quarter.

Except for Crystallex International, which remained at $2.14, the rest of the sub-group gained ground: Meridian Gold soared $1.28 to $24.44; Goldcorp jumped 93 to $19.50; Agnico-Eagle Mines climbed 38 to $21.03; Glamis Gold ascended 28 to $18.28; Gabriel Resources rose 17 to $4.60; Placer Dome increased 9 to $17.22; and Bema Gold edged ahead 6 to $2.

Off-index issue TVX Gold once again became the target of the Alpha Group, which nows claims a right of first refusal on the Greek assets. The group says the right was triggered by the proposed merger with Kinross and Echo Bay Mines. The matter is before the courts. TVX jumped $1.29 to $23.94.

Noranda, which was the biggest newsmaker in the base metals group, refuted a newswire story that said the Horne smelter in Quebec may be shutting down in favour of increasing production at other sites, such as Kidd Creek in Timmins. The smelter has been operating at 70% capacity since June, when 510 unionized employees walked off the job. Noranda continues to review possible synergies with subsidiary Falconbridge, owner of the Kidd metallurgical site. Noranda slipped 76 to $15.36, while Falconbridge climbed a nickel to $17.80.

Also down were Inco, off $1.19 at $34.11, and Teck Cominco, 70 weaker at $12.30, whereas Fording rose 5 to $33.65. Overall, the diversified metals and mining index ended the period 2.8% lighter, at 137.74 points.

Junior Southwestern Resources dove $2.47 to $14.78 as investors balked at a drilling update on the Boka gold project in China. Turns out the report, which was released after the market closed on Jan. 13, was nothing but a progress report — that is, not a tally of new results. The issue sank $4.45 over the following two trading days, only to recover later.