MINING MARKETS & INVESTMENT NEWS — EASTERN MARKETS — Listless gold eclipsed by rebounding base metals

Gold prices continued to languish below the US$260 mark during the June 16-22 report period, slipping 20 cents over the week to US$258.70 per oz. on the London morning fix of June 23.

Gold’s woes dragged down all of Canada’s major producers: Barrick Gold was down 30 cents to $25.45; Placer Dome dropped 15 cents to $15.60; Kinross Gold was off 20 cents to $2.30; Cambior lost 9 cents to hit $4.25; and TVX Gold shed 2 cents to close at $1.29.

Intermediate gold producer Agnico-Eagle Mines made a deal over the period to buy ground beside its Laronde mine in Quebec. The seller, Barrick Gold, will receive a combination of a 50% net profits interest and a 4% net smelter return royalty. Agnico-Eagle, which closed down a nickel at $7.65, is already launching an underground drilling campaign at the new property.

Montreal-based Lyon Lake Mines announced it would be scaling back its feasibility study at the Cerro Crucitas gold project in Costa Rica. The study, being overseen by Cambior, will now examine a US$60-million, 4,500-tonne-per-day mine rather than the previously envisaged US$135-million, 10,000-tonne-per-day operation. Lyon Lake rose a penny to close at 24 cents.

Bolivar Goldfields edged ahead 10 cents to 44 cents on news of improved production at its Tomi gold mine in Venezuela. The mine is now operating at full capacity and, in 1999, is expected to produce 66,000 oz. at a cash cost of US$118 per oz. About 80% of that production has been sold forward at US$294 per oz.

Montreal-listed Virginia Gold Mines fell 1 cents to 50 cents on 1.4 million shares traded. Exploration has begun at several of the company’s properties in northern Quebec, with $4 million budgeted for work programs in 1999.

Nickel enjoyed a strong week, surging 16 cents to US$2.48 per lb. Shares of Canada’s major nickel producers were buoyant on the news, with Inco gaining 90 cents to $24.75, Falconbridge rising 65 cents to $19.75, and Sherritt International climbing 25 cents to $3.20.

The other base metals also posted gains, with copper up 3 cents to US66 cents per lb., zinc ahead 2 cents to US47 cents per lb., and lead gaining a penny at US23 cents per lb.

Still, Canada’s base metal miners were a decidedly mixed bag: Noranda was up 70 cents to $18.80; Rio Algom lost 65 cents to $19.35; Teck’s B shares slumped 25 cents to close at $10.90; Cominco rose $1.05 to $23.55; and Boliden gained 14 cents to reach $3.35.

Denison Mines has been enjoyed a recovery of late, rising a penny this week to 16 cents. The Atomic Energy Control Board recently approved an operating licence for the McClean Lake uranium project in Saskatchewan. Denison has a 22.5% stake in the venture, with operator Cogema Resources holding a 70% stake.