MINING MARKETS & INVESTMENT NEWS — EASTERN MARKETS — Aber-Tiffany deal adds sparkle to dim market

Gold dropped to yet another 20-year low during the quiet report period ended July 20, losing $2.70 to hit US$252.90 per oz. on the London morning fix of July 21.

Most of Canada’s major gold producers showed declines: Barrick Gold was down 20 cents to $25.60; Placer Dome dropped 90 cents to $14; Cambior shed 33 cents to hit $4.17; Franco-Nevada Mining was down 80 cents to $20.35; and Euro-Nevada Mining dropped 50 cents to $15.70.

Surprisingly, two chronic underperformers bucked the trend: TVX Gold gained a penny to close at $1.15 and Kinross Gold climbed 17 cents to $2.50. Though Kinross stayed in the red during the past quarter, the company did achieve record-low total cash costs of US$192 per oz. on second quarter production of 247,176 gold-equivalent oz.

The strike at Falconbridge’s Kidd Creek metallurgical division in Ontario continued for a second week as unionized workers voted 94% in favour of rejecting the company’s latest offer. In the meantime, the company reported a $30.9-million profit during the second quarter, thanks in part to production from the new Collahuasi copper mine in Chile and to cost-cutting measures implemented throughout the company. Over the week, Falconbridge closed down 10 cents at $21.10.

Other base metal miners showing declines included Inco, down 70 cents to $25.40; Teck’s B shares, which fell 10 cents to $12.10; and Boliden, off 11 cents to $3.41.

Base metal gainers included Noranda, up a dime to $20.30; Rio Algom, rising 15 cents to $22.05; Cominco, climbing 70 cents to $25.60; and Sherritt International, up 4 cents to $3.22.

Among the juniors, Aber Resources was up $1.20 to $14.40 on news that New York-listed Tiffany & Co. would buy 8 million Aber treasury shares for $13 apiece. The $104-million deal gives the prestigious American jewelery retailer a 14.3% fully diluted share in Aber, which has a 40% stake in the Diavik diamond project in the Northwest Territories.

Dayton Mining held steady at 8 cents on reports of record quarterly gold production of 38,564 oz. at its Andacollo mine in Chile. Cash costs at the operation rang in at US$196 per oz.

Exploration drilling by Thundermin Resources and Queenston Mining at the Duck Pond copper-zinc property in Newfoundland appears to be adding tonnage to a volcanogenic massive sulphide deposit. One new hole cut 31 metres of 4% copper, 9.6% zinc and 1.5% lead, plus silver and gold, in an area northwest of previous drilling. Noranda has a back-in right on the property.

Vancouver-based Ariel Resources, the operator of several Costa Rican gold mines, saw heavy trading following an announcement that it acquired E-Health Network, an on-line medical information source. Ariel shot up 20 cents to 50 cents.