MINING MARKETS & INVESTMENT NEWS — EASTERN MARKETS — TSE inches up as equity markets recover

Base metals ahead of market in response to better commodity prices The base metals led the winning sectors as the Toronto Stock Exchange advanced slightly over the five trading days ended June 8. The golds slumped as the TSE 300 composite index added 85.32 points, or 1.2%, to close the period at 6,937.70.

Metal prices were the story again as the industrial metals rebounded — though modestly — from the previous week’s disaster. Nickel prices on the London Metal Exchange added 6 cents to trade at US$2.27 per lb. in the morning LME ring on June 9, while zinc added a penny for a price of US45 cents. Aluminum was also 1 cents higher, at US59 cents, lead was beaten back 1 cents to trade at US22 cents, and copper, at US63 cents, was fractionally lower.

The broad improvement in the underlying commodities showed in the performance of the stocks: Alcan, the wheelhorse of the TSE metals and minerals sub-group, added $2.75 to close at $47.30, pushing the index up 121.63 points (3.5%) to 3,607.05. Similarly, Inco was 50 cents higher at $23.15, helped along by nickel’s recovery and perhaps also by rumours that the company is close to a deal with the Newfoundland government over development of the Voisey’s Bay nickel deposit in Labrador.

Another strong performer was zinc-sensitive Cominco, which added $1.25 to close at $21.75. Cameco was also higher, picking up $1.50 to close at $31.50. Aside from Rio Algom, which was up 90 cents at $19.40, the copper producers were generally weaker: Noranda was off 20 cents at $17.50, and stablemate Falconbridge didn’t get the benefit of the nickel recovery, sliding a quarter to $17.65.

Inmet Mining dealt with another whammy, this time a report that the Ok Tedi mine in Papua New Guinea may be forced into an early closure by environmental problems. Inmet shares lost $1 to close at $2.50.

The gold price, which has been in the habit of vapourizing rather than melting in the past weeks, was US$5.05 lower at US$262 per oz. The yellow metal has lost US$23.50 per oz. since May 5. The platinum group continued to ride higher, with platinum up $2.50 at US$364 per oz. and palladium $8.90 higher at US$349. Silver was off 5 cents to trade at US$4.93 per oz.

There were no new announcements driving the gold price lower, but rumours of new central bank selling and increasing short positions depressed the price further. The fall in the price of gold has also driven physical buyers to the sidelines, as they wait for signs that the market is bottoming before buying for their own inventories.

The TSE gold index was down 67.05 points, or 1.4% of value, closing at 4,837.03. Most active was Placer Dome, trading a volume of 11.1 million and closing 40 cents lower at $15.70. Barrick Gold was up 45 cents at $25.50.

Despite Cominco’s advance, parent Teck’s B-shares weren’t soaking up any reflected glory, and joined most of the golds on the down slope to close 50 cents lower at $10.35.

The most active mining junior was Vengold, which lost 8 cents to end the period at just 10 cents. The company has been in free-fall since last autumn, when shares traded at $1.50.

Greenstone Resources fell 13 cents to 25 cents over the report period, and was trading at 19 cents at presstime. The share price tumbled from its already abysmal level following the release of first-quarter results that saw the company lose US$3.3 million.