MINING MARKETS & INVESTMENT NEWS — EASTERN MARKETS — TSE makes gains as royalty sisters prepare to merge

Regaining half of what it lost in the previous period, the Toronto Stock Exchange 300 index rose 87.69 points during the holiday-shortened period Sept. 1-7 to end at 7,058.50.

Gold continued an upward trend, rising 55 cents to trade at a London morning fix of US$256 per oz. on the morning of Sept. 8. Platinum and palladium both made strong gains, whereas silver eased off 3 cents to US$5.17 per lb.

The gold and precious metals sub-index closed down 49.22 points to end the period at 5,128.21. Canada’s major producers followed suit, led by Barrick Gold, which fell 35 cents to $28.45. Also taking hits were Placer Dome, off 25 cents at $15.25, and Kinross Gold, off 15 cents at $3.05.

On Sept. 8, shareholders of Franco-Nevada Mining and Euro-Nevada Mining overwhelmingly approved the companies’ proposed merger, paving the way for court approval in mid-September and official amalgamation shortly thereafter. Christened Franco-Nevada Mining, the company will become the world’s fifth-largest gold company, with a market capitalization of more than $3.5 billion and royalties or direct interests in more than 2 million ha, containing some 22.4 million gold-equivalent ounces. Anticipation of the vote pushed up Franco-Nevada 30 cents over the period to $23.80 and Euro-Nevada, 35 cents to $18.30.

Junior explorer Ecuadorian Minerals took top spot as the most active issue, rising 18 cents to 97 cents on 7.1 million shares traded. The company announced further results from preliminary drilling at its Beroen gold-silver project in Ecuador. The program outlined two wide, near-surface zones containing up to 46.7 grams gold and 358 grams silver per tonne over six metres.

On the back of stronger metal prices, the TSE metals and minerals sub-group rose 83.38 points to 4,132.85. Nickel posted the strongest gain of all metals, climbing 18 cents to US$3.29 per lb. and pulling along with it Inco, which rose $1.20 to $31.85, and Falconbridge, which edged ahead $1.10 to $24.40. Sherritt International climbed 7 cents to $3.37.

Despite higher copper prices (up 2 cents over the week), producer Rio Algom fell 65 cents to $22.50. The major recently announced it will write down certain assets and charge them to third-quarter earnings.

On the Montreal board, Appalaches Resources plummeted 12 cents to 15 cents for a loss of 44.44% of its market value. In late August, the company announced the discovery of a zinc-copper showing in the southwestern Gasp region but has yet to provide follow-up results.

Also, on no news, Afcan Mining doubled in value to 12 cents. Laboratory results are pending from a bulk-sampling program at the company’s industrial minerals project in Quebec. Afcan also owns a half-interest in the Kaloum-Kakoulima base metals project in Guinea, where London-listed Rio Tinto is earning a majority interest.