War jitters send golds higher

After a quiet start on Sept. 11, the Toronto Stock Exchange’s Composite index slid a whopping 226.04 points, or 3.4% of value, to end the Sept. 11-17 report period at 6,392.26 as prospects of a U.S. attack on Iraq grew.

The war jitters fuelled the gold index to a 3.16-point gain, finishing at 200.31. The yellow metal managed to yo-yo itself just US40 higher to US$315.90 per oz. at the Sept. 17 afternoon fix in London.

Kinross Gold was the nation’s busiest gold miner, falling 2 to $3.54 with nearly 33.6 million shares traded. The company’s 54.7%-owned Russian subsidiary, Omolon Gold Mining, is close to wrapping up a settlement deal, under which it will buy and cancel its Russian shareholders’ shares (except for 2% held by the Magadan administration) to stamp out unpaid loans from the administration to the shareholders. In the end, Kinross’s stake in Omolon will climb to about 98%.

Placer Dome was next in line among the major gold producers, gaining 36 to make $16.30 on about 19 million shares. Barrick Gold advanced $1.11 to $27.09. The major has unveiled a US$2-billion expansion program aimed at doubling its earnings by 2006. Also, it announced plans to clip its forward sales by more than 30% to 12 million oz. by the end of 2003.

In the mid-tier, Goldcorp continued to benefit from impressive exploration results at the Red Lake mine in northwestern Ontario. Drilling recently cut the deepest and richest gold zone yet found at the deposit. The issue rose 38 to $17.90.

Junior Manhattan Minerals wasn’t as fortunate, dropping a nickel to 47. A prefeasibility study of the company’s Tambo Grande mine in Peru calls for more second-phase production than originally planned. Local residents voiced their opposition in a non-binding vote earlier this summer.

Echo Bay Mines zigzagged its way 2 higher to $1.84, after restating its second-quarter, per-share results to 27 to reflect a loss related to an April share offering. For the 2002 first-half, the loss comes to 31 per share. Both were previously reported at breakeven levels.

North American Palladium continued its fall, ending $1.33 lighter at $7.41. NAP recently reported that the main crusher at its Lac des les mine in Thunder Bay, Ont., will be down 6-8 weeks for repairs. The company is also looking for a new CEO after the recent resignation of Keith Minty.

The bottom fell out from under the base metals, with prices falling across the board. Nickel must have felt like lead as it plummeted US$580 per tonne, or US26.3 per lb.

The base metal miners were a busy bunch. Inco inked a new 3-year pact with workers at its Thompson, Man., division. The party was short-lived, though, as the nickel miner then reported that work at its Goro nickel laterite project in New Caledonia had to be stopped after protests by local suppliers and contractors. Inco’s shares sagged by $1.84, or 6.5%, to $26.30.