Toronto miners droop during earnings season

Toronto stocks survived a late stumble to finish the holiday-shortened July 26-29 report period 60.38 points better at a multi-year high of 10,422.93. The S&P-TSX Canadian Gold Index reversed course and yo-yoed its way 4.34 points lower to 192.41. Gold itself tacked on US$3.60 per oz. to make US$429 by July 29.

Off $1 at $17, Placer Dome was the TSX’s most-traded miner, with nearly 10.7 million shares moving. Placer swung US$7 million into the red during the second quarter, a stark contrast to year-ago net earnings of US$33 million. Poor performance and a US$15-million tax charge on an Australian valuation are cited.

Bigger brother Barrick Gold saw its net income climb by 56% to US$53 million. Nonetheless, shares slipped 9 to $30. Barrick trimmed its hedge book by just 200,000 oz. during the quarter, opting instead to sell most of its production at current healthy gold prices.

Restated financial results still pending, Kinross Gold rounded out the nation’s major gold producers with a 60 drop to $6.76. Kinross poured 413,597 oz. gold-equivalent, down from 420,093 oz. a year earlier, as planned. The company continues to address queries by the Securities and Exchange Commission in the U.S. about a 2003 accounting of assets acquired via the merger with TVX Gold and Echo Bay Mines in 2003. The company said its 2003 results might face a “significant restatement.”

Top-tier hopeful Agnico-Eagle Gold Mines lost 42 to end at $14.98 even after its second-quarter earnings jumped by 45% to US$12.8 million. The LaRonde mine in Quebec produced fewer ounces than planned at 61,771 oz.; cash cost (net of byproduct credits) climbed by US$26 per oz. to US$103 per oz. Agnico also said it would develop the US$135-million Goldex project in northwestern Quebec. The mine is expected to pour some 170,000 oz. of gold at US$200 apiece, beginning in 2008.

The Diversified Metals & Mining crowd was no better off, finishing 3.52 points lower at 325.35. Inco shed $1.52 to settle at $50.40 after warning of lower third-quarter production; third-quarter and full-year costs are also expected to rise. The nickel giant second-quarter earnings totalled US$215 million, up from the year-ago net loss of US$14 million. Rival Falconbridge nearly doubled its second-quarter earnings to US$202 million on higher metal prices and increased production of refined nickel. Falco shares rose 45 to $25.25. Teck Cominco dropped $1.67 to $46.82 despite record second-quarter earnings of $225 million on higher copper, molybdenum and coal prices.

Alcan edged 30 higher to $41.40 after inking workers at its aluminum smelter in Kitimat, B.C., to a new 3-year labour deal, which includes a 3% wage increase in the first year, followed by 2.25% in the subsequent two years.

Uranium giant Cameco saw its second-quarter earnings more than quartered to US$32 million owing to lower earnings from Bruce Power and higher administration and exploration charges. A year earlier the company also enjoyed an after-tax gain of $89 million on the spinoff of Centerra Gold. Cameco finished $1.93 cheaper at $57.49.

Approval of a production expansion at the Dillon mine in B.C. helped Western Canadian Coal 53, or more than 12%, higher to $4.88. The coal miner turned a year-ago second-quarter net loss of $1.5 million into earnings of $4.6 million during the recent quarter.

Minieres du Nord soared 9, or 21%, to 52. The company’s 30%-owned Tulawaka mine in Tanzania has produced 38,143 oz. of gold since its first pour in mid-March to the end of June. Production for all of 2005 is pegged at 110,000 oz. Barrick operates and owns 70% of the mine.