Majors suffer as gold drops below US$300

After holding above US$300 per oz. for more than two weeks, the price of gold crashed down through that psychological barrier to end the April 3-9 period down US$6.25 to US$298.70.

As a consequence, Canada’s major producers staged a broad retreat: Barrick Gold fell $2.30 to $27.55; Placer Dome dropped $1.61 to $17.84; Kinross Gold sank 23 to $1.90; Cambior was off 7 to $1.74; and TVX Gold was down 12 to $1.04.

The scene was no better among the mid-tier darlings, with Goldcorp shedding $2.69 to hit $25.80, Agnico-Eagle Mines declining $1.35 to $20.35 and Meridian Gold falling 84 to $21.60 — despite announcing its intention to merge with U.K.-based Brancote Holdings.

Among the smaller gold producers, Golden Star Resources fell sharply, closing 85 lower at $1.70. A sometime-producer with cost-sensitive projects, McWatters Mining slid 5 to close at 12.

Other small producers were mostly in the same boat, but a few managed to hold on to the previous week’s gains; River Gold was steady at $2.15 and Rio Narcea Gold was unchanged at $1, while Richmont Mines actually tacked on 17 to finish at $4.47. Another Quebec-based narrow-vein miner, Campbell Resources, was up 2 to 63.

The base metal major also ended the week on the negative side, as prices for copper, nickel and zinc fell: Inco was down 64 to $30.95; Falconbridge fell 7 to $18.40; Noranda dropped 73 to $17.70; Teck Cominco‘s B shares sank 38 to $14.30; Aur Resources slipped 7 to $4.08; Breakwater Resources plummeted 11 to 25; Boliden nosedived 94 to $6.56; and Sherritt International fell 27 to $4.72.

Junior Chesbar Resources, which made a deal to buy out CDNX-listed Intrepid Minerals’ interest in the Buena Vista nickel laterite project in Guatemala, was a big gainer on the week, surging 17 to close at 36 with almost a million shares changing hands.

There was another bout of exuberance in the red-hot Canadian diamond scene as Ashton Mining of Canada shares rallied 34 to $2.79. The company reported that three newly drilled targets at its Otish mountains project in Quebec are confirmed kimberlitic intrusions. The cores will now be processed for diamonds at Ashton’s Vancouver laboratories. Ashton’s partner at the project is Quebec government-owned Soquem.

Another diamond hunter, Tahera, jumped a nickel to 33 as it reported good news from its Anuri diamond project, a joint venture with Kennecott with Nunavut. The first drill hole of the current exploration program has significantly expanded the tonnage potential of the diamond-bearing Anuri kimberlites.