Latest corporate downfall ignites investor revolt

As pessimism in multinational conglomerates stretched across the Atlantic, the Toronto Stock Exchange S&P/TSX plunged 107.41 points over the holiday-shortened June 26-July 2 report period, ending the week at 7,013.39.

On July 2, France’s troubled Vivendi Universal SA had its debt rating thrown into the junk pile and its accounting methods brought into question. Concurrently, the media and communication giant’s top executive was sacked, but not before impatient investors dumped the company’s shares on the New York and Paris stock exchanges.

Gold miners had nothing to celebrate either, as gold tanked $10.15 in overseas trading to settle at a London morning fix of US$314.45 per oz. on July 3. The TSE’s gold group lost 20 points to finish the period at 186.13.

Canadian majors Barrick Gold and Placer Dome each suffered heavy losses, with the former sinking $3.05 to $28.25 and the latter, $2.35 to $16.75. Similarly, heavyweight-wannabee Kinross Gold slipped 26 to $3.44 as 19.6 million shares changed hands, making it the most active resource stock.

TVX Gold and Echo Bay Mines, both of which are expected to be taken over by Kinross later in the year, ended the period mixed. TVX rose 17 to $21.90, reflecting a 1-for-10 share consolidation, and Echo Bay fell 12 to $1.75.

High River Gold Mines eased back 45 to $1.60 as it upped its stake in the Taparko project in Burkina Faso. The junior gold miner paid Queenstake Resources $1.2 million for that company’s 18.5% interest, thereby increasing its own grip to 80%. Queenstake failed to move on the news, remaining at 29.

Except for lead, which remained unchanged, base metals were up in London trading. Producers followed in step, led by Teck Cominco‘s B-series, which rose 60 to $15. Next came Inco, which climbed 36 to $33.50, and Falconbridge, which rose 22 to $19.55. Noranda was the only one of the big four to lose, slipping 21 to $18.91.

Overall, the TSE’s metals and mining group rose 1.27 points to end the period at 142.62. Contributing to that gain was Cameco, which rose $2.12 to $38.84.

Junior Tiomin Resources climbed 3 to 40 as it announced the receipt of an environmental licence and the approval of a port site for its troubled Kwale titanium project in Kenya. Construction crews must still await the issuance of a mining lease and other related permits.

SouthernEra Resources (suf-t), which fell 30 to $6.42, announced the Angola government’s approval of an operating agreement for the Camafuca diamond project in the Lunda Norte province. The diversified junior miner holds a 32% stake in the property, which is expected to begin churning out 220,000 carats annually, starting next year.