MINING MARKETS & INVESTMENT NEWS — EASTERN MARKETS — Big golds recover ground in weak market

The Toronto Stock Exchange slid badly over the trading period Sept. 15-21, with the TSE 300 composite index falling 220.22 points (3.1% of value) to close at 6,917.87 on Sept. 21. The base metal stocks were among the worst performers, falling 214.86 points to close at 3,969.54, but they were joined by a number of other market sectors including oil and gas, consumer product makers, and the banks.

In the midst of the suffering, the sad-sack golds at last found a place in the sun, adding 295.34 points to close at 5,405.61 — a gain of 5.8% on the week. Most of the gains came in trading on Sept. 21, when the gold market actually rose in tandem with a 25-tonne gold auction by the Bank of England.

The London morning gold fix on Sept. 22 saw the yellow metal at US$262.60, its best number since early July, and a jump of US$5.20 from a week before. On Sept. 21, the Bank of England’s announced sale (at US$255.75, still slightly above that day’s early market) was fiercely oversubscribed, doing nothing to dampen the price and possibly even sparking an increase. The white metals caught some of the fever, with silver up US13 cents at US$5.26, palladium up US$1 at US$366, and platinum up a whopping US$8.50 at US$382.50.

The stock market read the gold market’s reaction to the sale as a signal that the price would not be beaten up further — at least in the near term — and the buying spree was on.

Placer Dome, with 13 million shares trading, was the volume leader, and added $1.20 to close at $16.10. Barrick Gold was up $1.30 on a volume of 5.3 million, closing at $29.10.

Other golds joined the rally, with Agnico-Eagle Mines 25 cents higher at $9, Cambior up 9 cents at $3.79, Kinross Gold rising 25 cents to $3.35, and TVX Gold adding 15 cents to close at $1.36. Off the index, several small producers saw nice gains as well: Aurizon Mines was up 6 cents at 58 cents, River Gold picked up 5 cents to close at $2.05, and Richmont Mines soared 38 cents to finish at $2.63.

The new, bigger Franco-Nevada Mining (merged with sister Euro-Nevada) got a good reception from the market, as its trading debut neatly coincided with the rally in the gold price. Franco was $2.45 higher at $27.

The base metal market was solid, with nickel recovering US6 cents to finish the reporting period at US$3.19 per lb., copper up US3 cents at US81 cents, and lead and zinc picking up a penny each.

Inco, which locked out the workforce at its Thompson mine, was the most active of the base metals, with 10.6 million shares traded. The big nickel producer fell $1.30 to close at $32.75. Noranda was down $1.20 at $20.20 and Falconbridge slid 75 cents to $23.75.

Junior Ecuadorian Minerals rose 26 cents to $1.19 on 6.2 million shares traded. In early September, the junior explorer released a string of encouraging results from its Beroan gold-silver project in Peru.