Toronto Stock Exchange Gold isues stage comeback despite low prices

Investors are betting that interest rates are nearing their top and will begin to head down in the short term. Gold investors are ignoring growing talk that gold prices may suffer even more. James Capel, an investment house in the U.K., is forecasting a year-end price of $300 (US) per oz. Some observers are going even lower. All this bearish sentiment appears to have brought the contrarians out. Buying focused on highly capitalized major gold producers. Low capitalized juniors continue to be avoided.

The base metals sector witnessed a pause as the metals and minerals index declined 3 pts to 3551.85 pts. Copper came under selling pressure this week on news that LME copper inventories climbed once again. Some expected profit-taking also dampened activity.

Despite the marginal loss, several issues remained firm. Cassiar Mining closed at its recent high of $6.13. The company operates a very profitable copper mine in British Columbia. Another B.C. copper producer, Gibralter Mines, was also active, trading at $12.25. Earlier in the week, the issue reached a new high of $13.

Granges Exploration found a savior in the form of Australian mining giant MIM Holdings. MIM is putting $50 million into Grange’s treasury in return for a 33% controlling interest in the Canadian gold producer (see front page story). Granges was firm at $3.55.

In another deal, Corona Corp. has not raised its offer for control of Dickenson Mines and its affiliate Kam-Kotia Mines. Corona’s A shares were stronger at $9. Dickenson’s A shares advanced to $6.63 whereas Kam-Kotia closed at $2.65. Traders are betting that Corona will up the ante for both companies. In fact, management at Dickenson says that the Corona offer “will encourage additional proposals from other companies.” Wharf Resources, which is controlled by Dickenson, was also active, trading up to $6.13. Wharf operates gold mines in the western U.S.

Metall Mining was also a busy issue as more than 200,000 shares exchanged hands today. The issue firmed to a new high of $13.75 on news that it has purchased the Copper Range copper mining complex in Michigan. The price tag is $85 million(US). Operating costs are a competitive 70 cents (US) per lb of copper.

Other major base metal producers were also active. Cominco Ltd. traded more than 100,000 shares to close ta $26.50; off 13 cents for the day. Inco Ltd. was steady at $37.13 on volume of almost 300,000 shares today. Falconbridge Ltd. was also strong, closing at $28.88; unchanged from the previous day. Mineral Resources International, a zinc producer, was also unchanged at $5.63.

Quebec gold miner Cambior Inc. held on to recent gains, closing at $13.88. That represents an 88 cents gain for the week. Cambior has plenty of cash and i s, like most majors, looking for gold or base metals acquisitions.

Belmoral Mines, which is purchasing a 100% interest in the troubled Ketza River gold mine in the Yukon, added a dime to a $1.66. In Quebec, the company has stopped all activity at the Wrightbar property. More than $13 million was spent on that property in the hope that it would become a feed source for Belmoral’s nearby mill.

Canamax Resources, which sold its 50% stake in Ketza to Belmoral, dipped to a new low of $4.65 before recovering to $4.85. Rumours on the street are that the control block in Canamax held by parent Amax, is up for sale.

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