MINING MARKETS AND INVESTMENT NEWS — Eastern Markets — Precious metals slump while base metals languish

During the report period April 29-May 5, the Toronto Stock Exchange 300 composite index recovered from the previous period’s scare over interest-rate hikes. The index closed the period at 7,720.12, up 152.45 points for the week.

By May 6, all of the precious metals had slid from the previous week: gold dropped US$4.05 to US$303.50 per oz.; silver slumped 3cents to US$6.08; platinum was off US$5 to US$399; and even palladium — so strong of late — was down US$8 to US$354.

By the end of the report period, Boliden’s shares and installment receipts (IRs) had staged a bit of a recovery from the record lows recorded following the tailings dam failure at Los Frailes in southwestern Spain. On May 1, the shares traded as low as $9.05 while the receipts traded at a paltry $1.25.

For the week, the shares dropped 20cents to $10.20 as the IRs shed 35cents to close at $2.25. On May 6, the Spanish government said it wants the mine to be reopened within six months.

Inco had another rough week, dropping 50cents to $24.70. The governmental panel reviewing the company’s environmental impact statement for the Voisey’s Bay nickel-copper-cobalt project asked for more details concerning marine transport, water and waste management, impacts on Anaktalak Bay and Reid Brook, biological resources, mercury contamination potential, socio-economic effects, insurance and monitoring programs. This new information, once submitted, will be subject to a 45-day public comment period. In related news, Standard & Poor’s revised Inco’s outlook from stable to negative, citing concern over low nickel prices as well as the delays and uncertainties surrounding Voisey’s Bay. S&P affirmed Inco’s senior unsecured debt and credit rating at triple B-.

Problem-plagued Inmet sunk to a 52-week low of $4.25 mid-period, and finally closed at $4.55, down 85cents for the week. While the producer continues to struggle, word is that a buyer may come forward for Inmet’s 31.8% stake in Teck.

Placer Dome announced that it will sell its Cerro Crucitas gold property in northeastern Costa Rica. The 2.5-million-oz. deposit was discovered in 1992 and a subsequent deposit, named Conchudita, was defined last year. Placer says that the project does not “meet its strategic objectives.” Over the week, Placer dropped 30cents to $20.85.

The best-performing junior on the eastern markets was Moss Lake Gold Mines, which rose 5cents to 12cents on heavy trading. The company, 54% owned by River Gold Mines, holds a 2-million-oz., low-grade gold deposit in the Shebandowan area northwest of Thunder Bay, Ont.