Miners wither during earnings season (May 09, 2005)

The Toronto Stock Exchange tacked on 2.56 points to end the April 26-May 2 report period at 9,430.21. The meagre advance occurred in spite of the mining sector, as the gold index fell 4.2% to 177.67 points and the diversified crowd retreated 3.6% to 289.77. The base metals ended mixed while the shinies all headed south.

Bema Gold was the most-traded miner, at 18.1 million shares, though the stock traded down 45, to $2.43. The company recently acquired more than 2 million units of Venture-listed Victoria Resource at 55 apiece to hold 32.2% of the company. Bema, whose first-quarter financials are due out in mid-May 16, also holds 1.2 million Victoria warrants.

A $12.9-million increase in the estimated capital cost of Tahera Diamond‘s Jericho diamond mine in Nunavut sent 15.7 million shares 7, or more than 14%, lower to 42. The new $94.4-million price tag reflects requirements under the project’s water licence and land leases, issued earlier this year. Tahera also posted a wider first-quarter net loss: $950,000.

Placer Dome rounded out the top three traders with a $1.88 fall to $16.70 on a volume of 14.9 million shares. The major’s first-quarter earnings were more than halved to US$31 million as a result of lower production and higher costs. Erosion problems on the west wall of its 75%-owned Porgera open-pit mine in Papua New Guinea has trimmed Placer’s full-year production estimate by 50,000 oz., to 3.6-3.7 million oz.

On the flip side, Barrick Gold doubled its first-quarter earnings to US$51 million on a higher average realized gold price. The shares ended 42 better at $28.45.

Kinross Gold added 9 to make $6.82, as the company’s first-quarter gold-equivalent production came in 6% higher than budgeted at 410,480 oz.; costs were as expected. Production for the full year is pegged at 1.6 million equivalent ounces at a total cash cost of US$250-255 apiece in 2005.

A first-quarter net loss of US$9 million sent shares in Eldorado Gold 18 lower to $2.88. The loss is attributed to weaker gold sales and higher operating costs at the Sao Bento mine in Brazil.

Likewise Goldcorp fell 79 to $16.07. The company tabled plans to sell its Saskatchewan Minerals sodium sulphate operation in southwestern Saskatchewan. First-quarter financials (including those of Wheaton River Minerals’ operations from Feb. 15, 2005, on) are due before the market opens on May 16.

Noranda was the most-traded base metal miner, with just shy of 14 million shares finding their way 96 lower to $22.90. Shareholders approved plans to consolidate ownership of Falconbridge via an issue of preferred shares. Noranda posted higher first-quarter net earnings of US$176 million.

Teck Cominco found 4 to make $41.54, while Potash Corp. of Saskatchewan advanced $2.73 to settle at $107.13. Both firms more than doubled their quarterly earnings from the year-earlier period.

Cameco escaped with a 42 gain to reach $50.25 after its earnings slipped by 33% to $26 million.

YGC Resources returned most of the impressive gains accumulated in the previous report period to finish 15, or 22%, cheaper at 53. The company is drilling the formerly producing Ketza River gold property in the Yukon. YGC began trading on the TSX on April 13.