Mining group slides

The Toronto Stock Exchange’s composite index stayed range-bound during the report period June 21-27, settling at 9,998.09. A 2-parts-per-million change on the week for the broad market obscured some larger moves in individual sectors as the oils continued to gain strongly on higher crude prices while the industrials and the base metal miners slid.

The metals and mining group plunged almost 6%, ending the period at 289.24 points. The previous week’s star performer, Teck Cominco, was the goat, with B-series shares down $4 to $40.32 and A-series shares off $2.83 at $41.04.

Most active of the base metal stocks was Ivanhoe Mines, which closed at $9, down 32, on a volume of 7.1 million shares. Also heavily traded, but off the base metals index, was EuroZinc Mining, which fell 7 to 65 with 6.9 million shares changing hands. The company, which is rapidly paying back debts incurred for the purchase of the Neves Corvo mine, has retired another US$10 million.

Another off-index base metal miner to lose ground was HudBay Minerals, which fell 28 to $2.66. About 12 million of the warrants changed hands, sliding half a cent to 3.5.

With nickel prices rolled back almost 12%, producers found themselves in a shambles. Inco dove $3.21 to $46.52, Falconbridge was down 96 at $38.22, FNX Mining backed up 72 to $11.28 and Sherritt International slid 62 to $9.30.

The good news was in fuel minerals, as Cameco jumped 97 to $54.14 and Denison Mines rose 38 to $16.58. Uranium oxide prices are still at US$29 per lb., though contract prices are significantly higher.

The TSX gold index was down 0.55 point at 196.50, making it a relatively quiet trading period in comparison with the base metals. The London gold price was a little stronger, at US$437.50 per oz., up US$3.15, though you wouldn’t have known from the price moves of some of the non-hedgers: Agnico-Eagle Mines was down 2 at $15.44, Goldcorp, 10 at $19.16, and Iamgold, 12 at $8.24. Barrick Gold rose 20 to $30.20, Placer Dome was off 3 at $18.78, and Kinross Gold added a penny to close at $7.18. The biggest success was Glamis Gold, up 86 to $20.86.

The index explorers all lost ground, led by NovaGold Resources, which was off 91 at $9.46. Southwestern Resources fell back 13 to $10.27, and Gabriel Resources was down tuppence at $1.44.

Things were more interesting among the juniors. Mundoro Mining fell 35 on profit-taking, closing at $2.40, slightly down from its price when it announced feasibility results from the Maoling gold project in China. Abitibi exploration specialist Queenston Mining took off, rising 9 to 61. The company has five drills turning on several Kirkland Lake projects, including a program to test extensions of the ABM Zone discovery at Kirkland Lake Gold‘s Macassa mine.

Some high-grade drill results from the Angostura property in Colombia propelled Greystar Resources 71 higher to a close of $5.50. The development with the biggest implication was that four drill holes offer evidence that the Veta de Barro zone, north of the main Angostura deposit, is an extension of the known resource.

Sulliden Exploration was up 7 at 60, partly in response to a Peruvian court decision that allows an arbitration hearing to resume on the company’s Shahuindo property. Shahuindo, with an indicated resource of 38 million tonnes grading 0.95 gram gold and 23 grams silver per tonne, is the subject of a dispute with the vendor, Minera Algamarca, whose new controlling shareholder sought to reverse a November 2002 agreement to sell Shahuindo to Sulliden. Court decisions in September of last year reaffirmed the agreement, and the parties went to arbitration, but Algamarca applied for an injunction to stop the arbitration process. That injunction has now been overturned.