Juniors take spotlight on slew of mixed news

The Toronto Stock Exchange posted its strongest gain in weeks during the Nov. 27-Dec. 3 report period, thanks to a rally in the energy and financial sectors plus the release of positive economic news south of the border. The benchmark finished the period at 6,640.61, up 162.81 points.

In an unusual twist, juniors took centre-stage, led by Asia Pacific Resources. The hopeful potash producer stepped an inch closer to achieving its dream after Thailand’s Constitutional Court ruled in favour of the country’s new Mineral Resources Bill. A small group of senators had challenged the bill, which, among other things, would allow the government to issue a mining lease to Asia Pacific’s advanced Udon Thani project, 500 km north of Bangkok. Asia Pacific rose 4 to 9 on a volume of 35.7 million shares, making it the most active resource stock.

Southwestern Resources soared $2.85 to $5.80, though on relatively light volume, after announcing the discovery of bonanza gold grades in China. Tunnel XG-15, one of 134 adits dug in the Boka 1 zone, returned an average of 75.2 grams gold and 25.3 grams silver per tonne over 34.5 metres. A 2,000-metre drilling program has begun testing the zone’s continuity and possible extension to the Boka 8 prospect, about 3 km to the east.

Gitennes Explorations also released positive exploration results, but, curiously, it had fallen 1 by the period’s close. Preliminary drilling is showing the targeted secondary zone of enrichment at the Rio Blanco copper project, in Peru, to be thicker than previously thought.

Namibian Minerals, which also fell, by 2 to 9, warned shareholders it can not stay afloat unless new funds are raised. The company needs the money to repair and continue operating its marine diamond fleet off the coast of Namibia; so far, however, only the Namibian government has chipped in by waiving the next three years of royalty payments. The warning overshadowed news of record quarterly production in the three months ended Sept. 30.

Meanwhile, gold began the five trading days on a downward slide, before finding its footing on the final day to end the period ahead US$2.50. The yellow metal was fixed at US$320.70 on the morning of Dec. 4, and the TSE’s Gold Index soared 6.89 points to 172.60.

Placer Dome beat out rival Barrick Gold as the most active producer, climbing 90 to $15.55 on a volume of 10.4 million shares. Barrick rose 85 to $23.85 as 10.3 million shares change hands.

Driven by a rise in metal prices, the TSE’s Diversified Metals and Mining Index added 2.54 points to finish the period at 127.73. Inco was the most active of the bunch, rising $1.47 on 4.9 million shares to end at $33.45.

On Dec. 4, Teck Cominco and Westshore Terminals Income Fund stepped in to help beleagured Fording by offering shareholders $34 per share or one unit in a trust fund to be formed, or a combination of the two. The offer exceedes the $29-per-share hostile bid from Sherritt International and The Ontario Teachers’ Pension Fund.