Profit-taking in the resource sector pushed the S&P/TSX Composite Index 125.19 points lower to 10,525.49 during the Aug. 16-22 report period. The gold index retreated 6.29 points, or 3%, to 202.23, while the diversified miners slipped 9.22 points to 329.55, led by near-2% losses by nickel, lead, and aluminum.
Shares in Falconbridge remained the most heavily traded mining paper, with nearly 15.6 million shares winding their way $1.21 lower to $28.04. Swiss-based Xstrata recently grabbed a 19.9% stake in the newly enlarged base metal miner. Many market watchers expect Xstrata to move to a full takeover; others suggest Falco might look to stave off acquisition by merging with cross-town rival Inco. For its part, Inco ended $1.38 cheaper at $50.41.
Canada’s gold miners took it on the chin as the yellow metal dropped US$3.85 per oz. to close at US$439.65 in the afternoon in London on Aug. 22. Bema Gold was the busiest of the bullion brood dropping 6 to $2.42 on around 9.5 million shares. Bema recently posted a second quarter loss of US$12.3 million.
The major producers fell in line behind: Placer Dome dropped 68 to $17.80; Barrick Gold fell $1 to 31.48; and Kinross Gold stood out with a 4 gain to $7.87.
Even a tenfold increase in earnings by Goldcorp couldn’t keep it out of the red; the company slipped 66 to $20.85. The company sold 275,700 oz. gold from its bullion inventory for revenue of US$119.7 million; second quarter net earnings were US$98 million.
Eldorado Gold finished among the nation’s top ten most-traded miners, with some 7.2 million shares trading 31 lower to $3.50. The company’s proposed acquisition of Afcan Mining is slated to close in mid-September. Shares in Afcan finished off a nickel at 52.
European Minerals made a rare appearance on the top ten list, ending 3 higher at 71 on 6.2 million shares. In June, the company acquired the 14% interest it did not already own in the Varvarinskoye gold-copper project in Kazakstan for US$7.25 million, with US$5 million paid on closing. The company’s second quarter loss amounted to US$2.4 million.
Montreal-based Niocan put in the biggest percentage increase, jumping a quarter, or 45%, to 80 in spotty trading. The company has tried to bring its Oka niobium project in Quebec into production for nearly a decade.
Other percentage gainers were: Candente Resources, plus 22% to 72; European Goldfields, up 21.2% to $2; Metallica Resources, 17.2% better at $1.63; and Ontex Resources, which gained 14.7% to make 19.5.
Candente nearly halved its second quarter net loss to $152,773. Recent drilling has expanded the Canariaco Norte zone on the Canariaco property in Peru. The drilling is designed to expand inferred resource of 76.5 million tonnes grading 0.61% copper and 0.1 gram gold per tonne.
Meanwhile, Metallica says that Mexico’s Federal Court of Appeals has unofficially overturned a previous nullification of its mining permit for the Cerro San Pedro gold-silver project. An official ruling is expected soon.
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