STOCK MARKETS — Majors suffer through another week of low metal prices — Caledonia leads the junior pack with Canadian and African projects

The Toronto Stock Exchange 300 composite index ended the report period of Mar. 11-17 at 7,440.37 points, up 144.37, or 2%. The index hit yet another record high of 7,468.76 points during the week.

The Canadian dollar fell 54 basis points against the U.S. dollar over the report period, closing at 70.60cents on Mar. 17. The loonie also lost ground against the major European currencies and the yen.

The TSE’s gold and precious metals index dropped to 6,366.15 points, down 352.85 points, or 5.3%, from the previous week.

The price of the yellow metal dropped US$6.15 from the previous week for a London A.M. fix price Mar. 18 of US$289.10 per oz. The silver markets continued their recent volatility, with the metal losing a heavy US51cents to fall to US$5.80 per oz. over the report period. Platinum prices kept soaring, jumping US$2 to US$395 per oz. while palladium is beginning to look like it may actually match gold in value, gaining a whopping US$20 to hit US$276 per oz.

Among Canada’s major gold producers, Barrick Gold lost $1.60 to close at $27.55, Placer Dome dropped $1.40 to $17.55, TVX Gold was off 40cents at $4.30 and Kinross Gold held steady at $5.15. Only Cambior ended the week on a positive note, rising 20cents to $8.75.

Intermediate producer Royal Oak Mines tumbled 22cents to $1.50 amid reports of serious cost overruns at its Kemess gold-copper project in British Columbia.

Base metal spot prices saw little movement through the report period: Copper lost a penny to hit US80cents per lb.; zinc rebounded 2cents to US48cents per lb.; lead remained unchanged at US$25cents per lb.; and nickel gained 2cents to US$2.47 per lb.

The TSE mining and minerals sub-group slid 148.97 points, or 3.4%, to close at 4,241.03, though the sub-index did manage to hit another record of 4,423.92 along the way.

Two of the major base-metal producers fell on heavy trading: Inco was off $1.70 at $27.20 and Noranda slipped $75cents to $28.10. Other producers fared little better: Falconbridge shed 80cents to close at $20.95; Teck lost $1.20 to close at $19.25; Rio Algom lost a quarter, dropping to $28; Cominco lost $3.55 to close at $23.60; Boliden installment receipts remained unchanged at $4.05, and the company’s common shares dropped 15cents to $11.80. Only Inmet bucked the trend, rising 10cents to $5.80, as it admitted it could not fully finance its share of the Antamina project being undertaken with Rio Algom in Peru.

Closely watched Western Copper Holdings kept slumping, sinking $2.15 to $7.20 as the company and its partner Teck released more results from their San Nicolas project in Mexico.

Caledonia Mining was in the penny-stock spotlight, rising 38cents to 75cents for a total gain of 103% when the company made announcements concerning its diamond properties. In Canada, Caledonia and its partner, BHP Minerals Canada, will shortly begin drilling the Dunvegan property in the Northwest Territories to test geophysical and till-geochemical anomalies. The junior also hammered out a second joint-venture agreement with BHP on its Mulonga Plains property in western Zambia and has acquired a new property in South Africa’s Northwest province.

One of the hardest-hit juniors was Northern Crown Mines, which saw 41% of its market capital evaporate. The loss comes on the heels of the company’s decision to advance its Guadalupe de los Reyes gold project in Mexico’s Sinaloa state to the feasibility stage. A conceptual study by consultants recommends an open-pit, heap-leach operation that could produce 40,700 oz.

gold and 126,000 oz. silver annually over four years. Northern Crown closed down 19cents to 27cents.