Metal price rally sends producers higher

A rally in metal prices pushed both gold and base metal producers to higher ground over the holiday-shortened Aug. 27-Sept. 2 report period. The Toronto Stock Exchange gold subgroup tacked on 5.38 points to finish at 198.84 while the base metal sector marched 4.13 points ahead to 154.26.

Gold had a stellar week, soaring US$7.90 to land at a London morning fix of US$372.20 per oz. on Sept. 30. The upswing pushed Kinross Gold 54 higher, or 5.6% by value, to $10.24 on a volume of 17.3 million shares, making it the second-most active resource issue on the burse. Barrick Gold climbed 75, or 2.8%, to $27.68, and Placer Dome rose 32, or 1.7%, to $18.67.

Wheaton River Minerals hit a new 52-week high of $2.42 in intra-day trading before easing back to $2.25 by the period’s close, for a gain of 27 on the week. The mid-tier producer, which also ranked as the most active resource issue, announced a 5-fold increase in second-quarter earnings, thanks to newfound production from the 37.5%-owned Alumbrera gold-copper mine in Argentina and the wholly owned Peak gold mine in Australia. Wheaton also said that it expects to produce 500,000 oz. gold-equivalent over the next year, at a cash cost of about US$100 per oz. gold-equivalent, net of copper credits.

Goldcorp, which slipped 8 to $17.83, was among the few losers. Peers Meridian Gold and Agnico-Eagle Mines each climbed higher, the former by 49 and the latter by 64.

Among smaller producers, Eldorado Gold and Bema Gold each touched new 52-week highs before settling back by the period’s close. The former, which hit $3.70 in intra-day trading, closed at $3.59, for a gain of 40, while the latter, which hit $3.21, finished at $2.98, for a gain of 13.

Nickel showed the biggest move among base metals, leaping US37 to a London morning fix of US$4.52 per lb. — the highest it’s been since early 2000 — on Sept. 3. Inco, which finally settled its differences with unionized workers at the Sudbury and Port Colborne facilities, rose 91 to $33.05. Cross-town rival Falconbridge fared better, touching a new 52-week high of $21.07, before slipping to $20.91 by the period’s close, for a gain of $1.01.

Ivanhoe Mines also was among the 52-week-high crowd, and even managed to stay there. The diversified producer ended the period at $6.29, up 81. Among the rest of the subgroup, Noranda, aided by a US3-gain in spot copper prices, rose 11 to $13.96, and Aur Resources, for similar reasons, climbed 35 to $4.65.

Off-index issue First Quantum Minerals, which reached as high as $7 in intraday trading to set its own new 52-week high, finished the period at $6.95, for a gain of 45. In addition to a higher copper price, the company was pushed along by the announced start of steady-rate production at the expanded Bwana Mkubwa plant in Zambia and the subsequent release of quarterly financials that showed the producer making a small profit in the period ended June 30.