Resource stocks climb on backs of stronger Metal Prices

Ending three consecutive weeks of losses, gold jumped $7.15 during the Dec. 15-21 report period to land at a London morning fix of US$287 per oz. on Dec. 22. The yellow metal had been suffering a bout of central-bank-selling fever.

Accordingly, the Toronto Stock Exchange’s precious metals and gold sub-group soared 218.56 points to 5,045.38, even touching 7,333.82 at one point. Going along for the ride were Barrick Gold, which jumped $1.30 to $26.90, and Placer Dome, which jumped 75 to $15.85. The latter was also the period’s volume leader with 21.6 million shares changing hands.

Among diamond producers, SouthernEra Resources slipped 5 to $1.85. The junior miner announced, at the period’s end, that predicated mining grades had not yet been achieved at its Klipspringer diamond project in South Africa but that monthly production rates should reach 20,000 tonnes by March 2000. Better news was attached to the joint-ventured Camafuca project in Angola, where the average grade for the first bulk sample proved to be six times higher than historical grades from the same area. Also, a 1,514.75-carat parcel of stones was valued at US$126-140 per carat.

Base metal producers enjoyed another strong week of trading, with the TSE’s metals and minerals sub-index climbing 47.53 points to 4,154.18. On the morning of Dec. 22, nickel traded 6 higher at US$3.69 per lb., whereas copper was 2 higher at US81 per lb. Both lead and zinc remained unchanged, at US22 per lb. and US54 per lb., respectively.

Despite an early shutdown of the copper smelter at its Kidd metallurgical plant in Timmins, Ont., Falconbridge rose $2 to $25.55. The shutdown was caused by a failure in the wall of the converting furnace and will last 50 days, during which time the furnace’s hearth will be replaced with one that is expected to extend its life and the time between required maintenance periods. Consequently, copper production estimates for 2000 have been reduced to 136,000 from 140,000 tonnes.

Also posting gains in the period were: Cominco, up $1.25 to $29.80; Teck’s B-series, up 90 to $14; and Noranda, up 35 to $18.20. Noranda plans to sink another 3,000 metres on properties under option from Canadian Venture-listed Golden Temple Mining. All are in Mexico’s Guanajuato state and are considered prospective for massive sulphide deposits.

Junior Pacific Rim Mining surged 37 to $2.30 after releasing further geochemical results from its Luicho gold project in southern Peru. The latest samples raise to 1.82 grams gold per tonne the average for the entire 2,711 samples taken to date. Mineralization is now known to stretch for 1,850 metres in strike length and 250 metres in width.

Eldorado Gold climbed 26 to $1.05 on news that it had received a site selection permit for its Kisladag gold-porphyry project in western Turkey. Environmental baseline studies are under way in preparation for a prefeasibility study, slated to begin in late 2000. Measured and indicated resources are pegged at 42.8 million tonnes averaging 1.49 grams gold per tonne, while another 31.1 million tonnes at 1.35 grams are considered inferred.