Metal Prices sink as new year begins

When the world failed to come to a screeching halt on Jan. 1, 2000, investors came out of their bunkers and dumped on gold, driving down the yellow metal by US$8.55 over the report period to US$282.10 per oz. on the London morning fix of Jan. 5.

Platinum and palladium also staged a retreat, with the former falling US$14 to US$431 per oz. and the latter, US$11 to US$438 per oz. Enthusiasm for the metals was dampened by Russia’s new president, Vladimir Putin, who signed an amendment to a law that had previously stalled the country’s exports of platinum group metals, except palladium, throughout 1999. It was not clear if he had also signed legislation on export quotas for platinum group metals in 2000.

Silver managed to fight the down trend, moving up 9 to US$5.29 per oz., as China moved to restrict imports of the metal to protect its new silver exchange. The opening of the Shanghai exchange, which will be initially closed to foreigners, will end government fixing of silver prices.

The base metals also entered the New Year mostly on a down note, with nickel falling 4 to US$3.75 per lb., copper dropping a penny to US82 per lb., zinc off 1 to US54 per lb., and lead holding steady at US22 per lb.

During the holiday-shortened Dec. 28-31 stock report period (Jan. 4 stock prices are not reflected in this market story due to technical difficulties), most of Canada’s gold majors showed declines: Barrick Gold dropped 90 to $25.75; Placer Dome fell 70 to $15.40; Franco-Nevada Mining slipped 85 to $22.15; and Kinross Gold shed 12 to $2.68. Exceptions to the trend were TVX Gold, which edged up 1 to $1.13, and Cambior, which climbed 12 to $1.82.

The base metal majors generally fared better: Inco rose $2.60 to $33.75: Falconbridge gaining 50 to $25.80; Noranda gained 60 to $19.40; Rio Algom rose $1.50 to $21.50; Teck’s B shares were off 40 to $13.60; Cominco eased up 35 to $30.35; and Boliden gained 34 to reach a 52-week high of $4.49.

Tahera was the volume leader among Toronto juniors, seeing 11.4 million shares change hands. The stock was up 4 to close at 12 on news of a flow-through financing with CMP 1999 Resource Limited Partnership. The partnership takes 5.6 million shares at 9 each, netting $500,000 for Tahera to use at its Jericho diamond project in Nunavut.

Rex Diamond started drilling its Tenoumer diamond prospect in Mauritania late in December and rapidly became the TSE’s speculative darling. Over the report period, Rex rode the excitement to a high of $14.25 before fading to $13.40 at the close for a net gain of $4.05. Trading was hectic, with 2.3 million shares — worth about $31 million — crossing the floor. Rex has four confirmed kimberlites on its permit and one has proved to carry microdiamonds. Earlier drift samples contained some diamonds as well. Rex has promised real drill results “in due time.”