Resource stocks rally with higher Metal Prices

Buoyed partly by stronger resource stocks, the Toronto Stock Exchange 300 index ascended 136.7 points over the holiday-shortened March 27-April 2 report period to finish the week at 7,893.39.

Gold soared $7.45 over the period to land at a London morning fix of US$304.95 per oz. on April 3. The sharp gain trickled over into equity markets, pushing the TSE’s gold and precious metals sub-group up 238.57 points to 6,289.62.

Major Canadian producers of the yellow metal all marched forward: Barrick Gold was up $1.10 to $29.85; Placer Dome was up 75 to $19.45; and Kinross Gold was up 23 to $2.13. Kinross set a new 52-high of $2.39 before settling back to its closing price and was the most active mining issue, with more than 22 million shares changing hands.

Despite its troubles in Greece, TVX Gold rose 8 to $1.16 on a volume of 14 million shares, making it the second-most active issue north of the border. Subject to due diligence and other factors, the mid-tier miner is issuing 71.5 million shares, at $1.05 apiece, to a syndicate of underwriters led by BMO Nesbitt Burns.

The remaining mid-tier producers were up as well: Goldcorp rose 64 to $28.49; Agnico-Eagle Mines rose 75 to $21.70; and Meridian Gold rose 59 to $22.44.

The metals and mineral sub-group climbed 46.82 points over the report period, finishing at 4,726.75. Nickel rose 5 and copper, a penny, to trade, respectively, at London morning fixes of US$3.09 and US74 per lb. on April 3. Zinc was off a penny, at US37 per lb., whereas lead remained at US22 per lb.

Inco was the most active among base metal producers, rising 79 to $31.59 on a volume of 3.62 million shares. Among other miners: Noranda edged ahead 3 to $18.43 on 3.15 million shares; Teck Cominco’s B series fell 3 to $14.68 as 2.79 million shares changed hands; and Falconbridge soared $1.02 to $18.47 on 1.36 million shares.

Breakwater Resources was off 3 at 37 as it announced its intentions to issue $17.69 million worth of rights. Excluding those residing in the U.S., shareholders will receive one right for every share held, entitling them to purchase a treasury share at 20 until May 1. A total of 94.5 million new shares would be printed if all of the rights are exercised.

The most active junior was Nelson Resources, part owner of the Jilau gold mine in Tajikistan and half-owner of Kazakhoil Aktobe. The Kazakstani subsidiary has acquired a contract to export crude oil to international markets from the Alibekmola oil field in western Kazakstan. Nelson failed to rise on the news, standing pat at 69 as 11.8 million shares traded.

First Dynasty Mines took the prize for highest percentage gain, ballooning 178% to 16. In mid-February, the junior nabbed the other half of FDM Armenia, owner of the Ararat, Zod and Meghradzor gold projects in Armenia.

Junior Summo Minerals slipped 2 to 6 as it divulged plans to settle its debt and restructure its share capital. All outstanding warrants will be repriced at lower conversion rates, with all remaining debt converted into equity and $5.7 million worth of new rights issued to existing shareholders, possibly resulting in the issuance of 272.7 million new shares. Following this, the company will consolidate its shares on a 1-for-10 basis to leave itself debt-free and 35.6 million shares issued and outstanding.