MINING MARKETS & INVESTMENT NEWS — EASTERN MARKETS — Majors sag as gold sinks below US$300 per oz.

The party came to an abrupt end during the Oct. 20-26 report period as gold nosedived US$19.35 to hit US$290.40 per oz. on the London morning fix of Oct. 27.

During the last week of October, most of the gold selling came from New York trading, while most of the buying came from Hong Kong trading. This led to speculation that some of the large New York-based funds have been selling into the spot market in order to drive down prices and relieve outstanding short positions.

Gold’s weakness took its toll on most of Canada’s major producers: Barrick Gold tumbled $2.55 to $26.80; Placer Dome fell $1.65 to $18.10; Franco-Nevada Mining dropped 15 cents to $27.60; Kinross Gold was up only 11 cents to $3.97; and TVX Gold was off 21 cents to $1.42.

It was a tough week for the two prairie giants: uranium miner Cameco fell $2.95 to $22.50 as it reported an operating loss of $17 million during the third quarter, while fertilizer king Potash Corp. of Saskatchewan plummeted $10.15 to $63.85 as management finally bit the bullet and took a US$518-million writedown on the carrying value of its underperforming nitrogen business.

Inco made two announcements: the commissioning of its Goro nickel-cobalt pilot plant in New Caledonia and the discovery of a new zone of nickel-copper-platinum mineralization at the dormant Totten mine in Sudbury. The major also celebrated a modest US$7-million third-quarter profit — its first since early 1998. Over the week, Inco dropped a nickel to $30.90.

Diversified nickel producer Sherritt International shot up 36 cents to $3.31 as it announced a $19-million rise in third-quarter profits to $26 million on revenue of $99 million. The company achieved the highest quarterly production rate ever at its 45-year-old Fort Saskatchewan refinery and posted a record operating profit of $16.8 million from its metals business.

Teck’s B shares fell $1.05 to close at $13.15, despite the announcement of third-quarter profits of $12 million, which were mostly derived from its 40% stake in zinc producer Cominco. The latter, unchanged at $25.50, posted a healthy third-quarter profit of $31 million, compared with an $11-million loss a year ago.

Among the remaining base metal majors, Noranda was off 5 cents to $19.25, Falconbridge rose 30 cents to $22.55, Rio Algom declined 10 cents to $18.85, and Boliden slipped 9 cents to $3.91.

Among juniors, Etruscan Resources jumped 13 cents to 65 cents on news that Semafo had agreed to buy a half-interest in African Geomin, Etruscan’s subsidiary in Niger. The deal paves the way for renewed drilling on the Libiri gold deposit and advancement of the nearby Samira Hill project. Semafo rose 8 cents after the announcement but soon gave that back gain, ending the period unchanged at $1.

Summo Minerals climbed 4 cents to 12 cents on light trading. The junior recently began a preliminary drill program at its Lisbon Valley project in Utah, where copper oxide mineralization occurs in sandstones.