Producers miss out on gold price ride

Pushed down by heavy losses in the high-tech sector, the Toronto Stock Exchange’s 300 index fell 391.91 points over the five trading days ended June 20, to finish at 7,702.87.

The yellow metal clawed back 60 to a London fix of US$272.40 per oz. on the morning of June 20. Also ahead were silver, up a penny to US$4.40 per oz., platinum, up $6 to US$580 per oz., and palladium, up $21.50 to US$618 per oz.

Despite gold’s rebound, Canada’s major producers all lost ground: Barrick Gold dipped 66 to $25.50 on a volume of 9.9 million shares; Placer Dome sank 37 to $16.50 on a volume of 7.1 million shares; and Kinross Gold slipped 9 to $1.40 on a volume of 11.6 million shares.

Mid-tier producers fared better, with Goldcorp rising 35 to $16.55 and Agnico-Eagle Mines climbing 24 to $12.94. The latter announced the completion of a $108-million equity financing to expand its LaRonde gold-copper mine, near Val d’Or, Que.

Energy stocks received a boost in the form of new owernship rules for Cameco. Individual foreign investors can now own up to 15% of the uranium miner’s non-voting shares and 25% of its voting shares. The limit for individual Canadians remains at 25%. Cameco jumped 71 to finish at $36.30.

Blemishing London markets once again, nickel fell 13 to a London morning fix of US$2.91 per lb. The other base metals were quiet, with lead and copper coasting through the week and zinc deflating a penny.

Inco and the government of Newfoundland returned to the negotiating table after a long break. Talks fell apart earlier this year, when the government sought guarantees that Inco would process ore from the Voisey’s Bay massive sulphide project in-province. Inco slipped 13 to $27.10.

Cominco announced its foray into Minnesota, where it will apply its new hydrometallurgical technology to the Mesaba copper-nickel deposit. Near-surface resources are pegged at 700 million tonnes grading 0.46% copper and 0.12% nickel. Cominco fell $2.58 to $30.47 on a volume of 3.4 million shares.

The remaining base metal producers were a mixed bag: Falconbridge sank $1.13 to $17.50; Noranda climbed 12 to $16.91; Teck‘s B-series tanked $1.32 to $13.80; Boliden fell 18 to 57; and Sheritt International edged ahead 8 to $5.62.

Among juniors, Nevsun Resources slipped 2 to 38 on a volume of 595,000 shares. Curiously, the loss follows the release of positive results from ongoing infill drilling at the Tabakoto gold project in Mali. Drilling is attempting to prove up an open-pit deposit.

Tan Range Exploration slipped a penny to 46, despite announcing that Barrick had exercised 740,741 warrants at $1.35 apiece. The major has the right to earn a 60% interest in Tan Range’s Itetemia project in northern Tanzania.