Producers rise as gold nears US$300-per-oz. level

Gold staged a strong comeback over the Jan. 30-Feb. 5 report period, rising $16.50 in London markets to finish at US$297.45 per oz. on the morning of Feb. 6.

Canada’s major producers also rose with the yellow metal: Barrick Gold soared $2.80 to $29.85, Placer Dome jumped $2.42 to $21.67, and Kinross Gold ascended 43 to $1.87. Barrick also released statistics which showed that it poured 6.1 million ounces in last year at a cash cost of US$162 per oz.

Gold’s appreciation also boded well for the mid-tier darlings: Goldcorp sprang $3.79 to $26.15; Meridian Gold leaped $3.78 to $22.98; and Agnico-Eagle Mines rose 35 to $19.60. Also stronger was TVX Gold, which rose 12 to 96 on a volume of 36.7 million shares to make it the most active mining issue on the TSE.

LionOre Mining climbed 32 to $2.90 on news that it had intersected 10 metres of high-grade nickel mineralization on a property adjoining its advanced Thunderbox gold project in Australia. Thunderbox, which is scheduled to pour its first gold bar late this year, is a joint venture with Australian-listed Dalrymple Resources.

Base metal prices enjoyed a mild turnaround, with nickel climbing 12 to a London morning fix of US$2.86 per lb. on Feb. 6. Copper climbed four pennies to US72 per lb., while lead and zinc remained unchanged.

Inco went ahead a dime to $27.95 and Falconbridge rose a nickel to $16.30. The former lost US$5 million in 2001, whereas the latter earned $16 million; however, both companies did far, far worse than in 2000, when metal prices were stronger.

Depressed metal prices also took their toll on Teck Cominco, though $122 million in writedowns played a role as well. The company’s B-series shares slipped 8 to $13.20.

Among other major producers, Noranda slipped 11 to $15.54, Cameco dropped 22 to $41.58, and Alcan sank 59 to $59.21. Overall, the metals and minerals sub-group lost 22.63 points, or less than 1% of its value, to finish the period at 4,301.44.

Among juniors, Ivanhoe Mines rose 20 to $3.05 as it assumed full ownership of the Turquoise Hill copper-gold project in southern Mongolia. The company has spent the required US$3 million on exploration and paid New York-listed BHP Billiton US$5 million in cash.

Wheaton River Minerals rose 18 to $1 as it sold the Red Mountain project to Vancouver-listed Seabridge Resources. In return, it received 800,000 Seabridge treasury shares and is entitled to an additional contingent of up to $400,000. Concurrently, Wheaton River sold one million Kinross shares at $1.75 per share for gross proceeds of $1.75 million.

Cumberland Resources rose 37 to $1.52 as its recent update at the Meadowbank gold project in Nunavut continued to entice investors. In the previous period, Cumberland announced a doubling in the projected production rate after including the Vault deposit, which was discovered late last year.