Hedge trimmers lead the way

In the first five days of trading under its new moniker, the S&P/TSX composite index shed 85.93 points, or more than 1%, coming to rest at 7,561.37 on May 7.

Inspired by a run up to US$312 per oz. on the London afternoon fix on May 7, the Gold Index tacked on 11.35 points to end at 199.47.

Kinross Gold was the busiest major gold producer, adding 46 to close at $3.10 with more than 28 million shares changing hands. Kinross plans to deliver into its small gold forward sales but, because of improved gold prices, will not replace the hedges. Kinross has a total of 539,000 oz. hedged through to 2005 at prices between US$277 and US$296 per oz. The company’s call-options sold more than 200,000 oz. at US$320 and US$340 per oz. through to 2004.

Barrick Gold grabbed 67 to reach $30.70. Traditionally one of the largest hedgers, Barrick will shave about 3 million oz. off its hedge position by year-end by not renewing its gold call and variable-price contracts. The move is part of Barrick’s plan to sell half its production at the spot price.

The country’s remaining major, Placer Dome, climbed 95 higher to end at 19.60. TVX Gold was the most active resource issue, adding 7 to reach $1.37 with fewer than 36 million shares traded.

A raft of mid-tier producers released first-quarter earnings reports. Goldcorp advanced $1.83 to $29.75, Meridian Gold jumped $2.91 or 12% to $26.60, Glamis Gold finished off the period 16% higher at $11.15, and Iamgold gained 55 to end at $7.60. All posted higher first-quarter earnings.

The country’s base metal miners were less fortunate as the Diversified Metals & Mining index was able to scrape together just 0.83 of a point to hit 142.69.

Sherritt International was the most heavily traded base metal stock, falling 13 to $4.67 with nearly 2.8 million shares exchanged. Sherritt’s first-quarter earnings came in flat at $22.4 million despite a near-doubling of revenue to $184.2 million. Next in line was Teck Cominco‘s B series, which lost 12 to $13.70, trailed by Inco, which climbed 47 to $32.44.

Cameco slid 85 to $41.75 on 1.1 million shares. The uranium miner’s net earnings of $5 million is $4 million better than last year. The company recently announced a find of “significant uranium mineralization” at the Hidden Bay property in Saskatchewan’s Athabasca Basin area. The property is held by UEX Corp., which was formed via a joint venture between Cameco (40%) and Pioneer Metals (60%) late last year. For their part, Pioneer shares were off a penny to 23.

Also making news were Metallica Resources and Noranda. Drilling by the partners at the La Fortuna area of the El Morro copper-gold project in Chile has returned 970 metres averaging 0.65% copper and 0.53 gram gold per tonne. Metallica shares soared 26 or 21% to $1.51. Noranda shares fell 7 to $19.45. Noranda also announced that its Bell Allard underground zinc mine in Matagami, Que., would shut down for a month at the end of June, owing to low metal prices and high metal inventories.