War cries frighten bulls, golds charge ahead

The ongoing threat of war in Iraq clipped 170.31 points off the S&P/TSX composite index over the Jan. 22-28 report period. The index, which lost 70.58 points in the previous period, ended the recent one at 6,570.09.

The uncertainty had the opposite effect on gold, which peaked at US$370.85 in mid-period, before easing back to US$369.85 on the morning of Jan. 29, for an overall gain of US$10.60 on the week. Canadian producers likewise benefitted, rising 7.07 points to 200.47.

Kinross Gold was the most active of the precious metal and base metal producers alike, slipping 3 to $3.69 on a volume of 36.3 million shares. On Jan. 28, the company’s shareholders approved the proposed 3-way merger with TVX Gold and Echo Bay Mines, giving shareholders of those companies the final say. TVX gained 4 to $23.98, while Echo Bay eased back a penny to $1.91.

Barrick Gold, also up on heavy volumes, served a libel notice on Blanchard & Co. and its chief executive, Donald Doyle Jr. The notice came in response to an anti-trust suit the New Orleans-based company filed in December 2002 that accusses Barrick and J.P. Morgan Chase of making some US$2 billion in short-selling profits over the past five years at the expense of individual investors. Barrick ended the period up $1.55 at $25.49.

Also ahead were: Placer Dome, up 60 at $17.80; Agnico-Eagle Mines, up 83 at $22.25; Meridian Gold, up $1.14 at $25.58; and Iamgold, up 48 at $8.13. In an unusual twist, Goldcorp diverged from its peers, slipping 21 to $19.29.

Nickel took the biggest hit in overseas base metal trading, nosediving US13 to US$3.67 on the morning of Jan. 29. Lead, copper and zinc each slipped a penny.

Noranda, once again, was the biggest newsmaker of the group, this time as a result of deciding to close its troubled Magnola magnesium plant and take an after-tax charge of $630 million against fourth-quarter earnings. The gates will close in a few weeks and remain shut for at least a year or possibly longer, depending on magnesium prices. Noranda ended the period at $14.55, off 81.

Lionore, up 6 at $5.50, said it will proceed with development at the Maggie Hays nickel project in Western Australia. The company intends to truck mined ore to the smaller Emily Ann mine to the south, thus boosting the company’s output from the region by as much as 2,600 tonnes annually.

Except for Fording, which rose 10 to $33.75, and Sheritt International, which stayed put at $4.84, the rest of the group lost ground: Cameco tanked $1.01 to $37.49; Aur Resources dropped 43 to $3.32; Falconbridge sank 42 to $17.38; Inco, the most heavily traded, dropped 35 to $33.76; Teck Cominco B-series fell 28 to $12.02; and Ivanhoe Mines slipped 7 to $3.01.

Overall, the diversified metals and mining sub-group lost 2.9 points to finish the period at 134.84.