PGEs defy gravity on TSX as golds sink

Platinum and palladium stood out from the pack, gaining US$51 and US$13 per oz., respectively, during the April 7-13 report period.

Platinum ended at US$930 per oz., while palladium came in at US$333 per oz. in the afternoon in London on April 13. The rest of the metals, both base and precious, ended lower, helping the resource-laden Toronto Stock Exchange drop 44.01 points to 8,763.58.

Gulf International Minerals grabbed the spotlight by announcing it has been in discussions with the Royal Canadian Mounted Police and the British Columbia Securities Commission regarding “activities of certain current and former directors, officers, shareholders and employees.” A committee of independent directors continues to probe the company’s transactions and is working with authorities to ensure a thorough investigation. The TSX is also reviewing the continued listing of the company’s shares. Meanwhile, financier Ian McKinnon has resigned from Gulf’s board, citing personal reasons. The company’s shares ended the holiday-shortened period 2 lower at 35.

Surging platinum prices and a suspended diamond mine are inducing SouthernEra Resources to consider splitting the company in two. The company produces platinum from the recently completed Voorspoed shaft at the Messina mine in South Africa. (Mining at the 50%-owned Klipspringer diamond mine in that country was suspended late last year as the rising South African rand made the operation unprofitable.) The company’s shares dropped 7 to $4.24.

Shares in North American Palladium rode early gains as high as $19.25 as the palladium price was dragged along by its sister metal. Belgian-based Umicore recently said it has made a breakthrough in the substitution of palladium for platinum in catalytic converters for diesel cars. NAP shares took a blow later in the report period, after it said maintenance work on the Lac des les mill, near Thunder Bay, Ont., trimmed about 3% off its first-quarter palladium production. The issue ended $1.99, or 11%, lower at $15.86.

Silver retreated from its recent high, ending US30 lower at US$7.86 per oz. Pan American Silver followed suit, shedding $4.11, or more than 16%, to finish at $21 even. Similarly, Western Silver lost $1.61 to $9.99. A recently completed prefeasibility study concludes that the silver-rich Chile Colorado zone on the company’s Penasquito polymetallic project in Mexico could generate an after-tax internal rate of return of 15.3%, with payback coming just shy of five years.

The country’s major gold producers all suffered bruises from gold’s tumble: Barrick Gold lost $1.44 to $29.40; Placer Dome shed $1.52 to $21.98; and Kinross Gold ended 64 cheaper at $9.16. The TSX’s gold index bottomed out at 216.94, off 6.95 points from its previous close, as the yellow metal plummeted US$11.10, to US$407.90 per oz.

The picture wasn’t any brighter among the diversified miners, which, as a group, fell 14.01 points to 213.80. Among the losers were: Inco, down $1.21 to $44.38; Falconbridge, off $1.82 at $32.65; Noranda, 38 lower at $23.48; Teck Cominco‘s B series, minus 52 to $23; Aur Resources, less 40 to $6.29; and Cameco, which finished $2.70 to the bad at $62.75.