MINING MARKETS & INVESTMENT NEWS — EASTERN MARKETS –Toronto market falls sharply in broad selloff

The Toronto Stock Exchange took a beating over the report period July 29-Aug. 4 as markets around the world saw bears emerging from their dens.

The TSE 300 composite index fell 363.51 points over the four trading days, finishing 5.4% lower at 6,704.33 points.

North American equity markets were all lower as the New York Stock Exchange plunged for three successive days. The Aug. 3 civic holiday in Toronto meant only that the bears made up for lost time on the following day.

The metals and minerals subgroup was down 207.57 points to 3,108.23, a loss of 6.4%, with fears of a slowdown in the U.S. piled on top of earlier worries about recession in Asia. Base metal prices were mostly lower, as nickel slid 12 cents to US$1.86 per lb. and copper was off 3 cents to US74 cents.

Inco, pummelled by falling nickel prices and facing worries over the Voisey’s Bay project in Labrador, was the most active of the base metal miners, closing $1.85 lower at $15.65, a 52-week low. No progress has been made in negotiations with the government of Newfoundland, which is insisting that Inco commit to building a smelter and refinery in Newfoundland.

Perhaps showing how the market views the chance of a $4.50 cash distribution, Inmet was unchanged at $4.40. Management recommended that shareholders reject a proposal by takeover bidder Zemex to distribute the company’s cash to shareholders, and merge the residue with Zemex.

The gold and precious minerals subgroup was also lower but did not suffer as much as the base metals or the other market sectors. The TSE gold sub-index fell 284.58 points to 5,395.59, for a loss of 5%.

Barrick Gold was the most active on the board, shedding $1.45 to close at $24.95. Placer Dome closed at $15.70 — 50 cents lower.

In the junior markets, Golden Star Resources climbed 50 cents to $2.50 on news that it is selling the Eagle Mountain gold property to the operators of the nearby Omai gold mine. Both projects are in Guyana, and their combination is expected to prolong the mine’s life. As well, the company received positive geophysical and metallurgical tests from two gold properties in French Guiana.

Also up 50 cents was Samax Gold, which ended the period 50 cents shy of its 12-month high of $7. Of late, the London-based company has been rolling in positive news from several African properties, most recently at a 6,500-sq.-km permit in Congo. There, two near-surface intersections of 28.5 metres of 3.7 grams gold per tonne and 18.8 metres of 3.8 grams gold came from drilling an alteration zone situated near alluvial gold workings. Both holes ended in mineralizations and the intersections are thought to represent true widths.