Producers rise as broad market blows

The Toronto Stock Exchange composite index began the Aug. 21-27 report period on an upswing and stayed that way until the final day, when it reversed to 6,642.83 for a modest loss of 12.46 points over the week.

Gold producers were not among the losers: the TSX gold index rose 12.05 points to finish at 176.88. Behind the surge was a $2.60 increase in the price of the yellow metal, with London having placed the spot at US$310.95 per oz. on the morning of Aug. 28.

Placer Dome was the most heavily traded resource stock, rising $1.72 to $14.96 on a volume of nearly 21 million shares. Rival Barrick Gold came in a close second, with the exchange of more than 18 million shares, pushing it up 97 to $24.32. Next came Kinross Gold, which clawed back 27 on a volume of 16 million shares to rest at $2.93.

SouthernEra Resources leapt $1.20 to $6.20 on higher platinum and palladium prices and on news it had penned a feasibility study that favours development of the Doornvlei section of the Messina mine in South Africa. The addition — the Voorspoed section has been in production for over a year now — should see the company’s annual production rise to 400,000 oz. platinum group metals plus gold.

Also benefiting from the rise in platinum and palladium prices was North American Palladium, Canada’s only primary producer of the metals. The company, which gained a quarter to $8.25, announced it had earned as much in the second quarter as it had in the corresponding period of last year, even though revenue soared on the back of increased production.

In the diamond sector, marine miner Namibian Minerals sank 2 to 20 as it announced another quarterly loss despite higher production. The second-quarter results would have been better were it not for a substantial writeoff, but the elimination of the goodwill is telling in and of itself. Namibian expects to raise more funds from its principal shareholders and lenders, without which it may go belly-up.

Base metal prices were all higher in London: nickel climbed 7 to US$3.13 per lb.; lead, 1 to US20 per lb.; copper, 1 to US68 per lb.; and zinc, 1 to US35 per lb. Rising in tandem, the Diversified Metals and Minerals index gained a modest 49 points to end the period at 122.58.

Inco, the most active of the base metals group, gained $1.56 on a volume of under 5 million shares, to end at $29.96. Crosstown rival Falconbridge, also susceptible to nickel prices, tacked on 79 to finish at $17.45.

Cameco and Teck Cominco stood out as losers, with the former’s shares sinking 93 to $31.27 and the latter’s B-series shares falling 65 to $10.85. Also down was Sherritt International, which slipped 43 to $4.59.

Junior Sulliden Exploration, which fell 4 to 25, inked a deal for the Shahuindo gold property in Peru. The company has three months in which to complete due diligence, after which time it must pay US$320,000 to seal the deal.