Weaker gold price puts chill in eastern markets

The Toronto Stock Exchange’s Composite Index managed to gain 105.22 points, or 1.6% of its value, to end the Aug. 14-20 report period at 6,655.29 points. The brunt of the work was done during the last two days of the period, and came without the help of the gold index, which slid in at 164.83 points, off 1.31 points from the end of the previous 5-day period. Not surprisingly, the yellow metal saw a similar fate, falling from a mid-period high of US$314.20 per oz. to US$308 per oz. at the time of the afternoon fix in London on Aug. 20.

Kinross Gold was among the leading TSX traders, falling 18 to $2.67 on a volume of more than 15.2 million shares. U.S. anti-trust authorities recently OK’d Newmont Mining‘s plan to convert its 45.3% stake in Echo Bay Mines into a 14% interest in the new Kinross Gold. Echo Bay, along with TVX Gold, are looking to wrap up their 3-way merger with Kinross by the fourth quarter.

For their parts, Echo Bay finished 9 lighter at $1.36 and TVX Gold slipped $1.18 to $17.15. TVX recently posted improved second-quarter earnings of US$800,000 on substantially higher revenue of US$45 million, thanks to a US$1.2-million gain on the sale of its residual interest in the Casa Berardi mine in northwestern Quebec.

Barrick Gold and Placer Dome took their usual spots at the head of the bullion class. Barrick shed $1.21 to hit $23.67 and Placer finished 53 lower at $13.47. On Aug. 16, Placer extended, for the fourth time, its offer for AurionGold. At last count, Placer had grabbed more than 31% of the Aussie gold miner’s shares, but a controlling stake was in doubt as two of AurionGold’s larger shareholders, with 22% between them, rejected Placer’s offer.

The base metals mostly enjoyed gains over the period, and that was reflected in the TSX Diversified Metals and Minerals Index, which gained 6.66 points to reach 122.09 points.

Aluminum giant Alcan saw the most action among the base metal miners, advancing 63 to $43.63. Alcan recently inked a deal to double to 40% its stake in the 243,000-tonne, low-cost Aluminerie Alouette smelter in Sept-les, Que., by acquiring Corus Group’s 20% stake for about US$165 million. Corus is making an exit from the aluminum business to focus on carbon steels.

Also on the rise were: Sherritt International, which regained a dime to $4.86; Aur Resources, 15 richer at $3.4; and Cameco soared $3.65 or nearly 13% to $32.50. Bruce Power, in which Cameco has a 15% stake, expects one of its Bruce nuclear plants to resume operations later this month, following maintenance. About half of Cameco’s gain was wiped out on Aug. 21.

Noranda ended 38 to the good at $16.90. The company recently dropped the axe on the Montanore copper-silver project in northwestern Montana after an updated feasibility study deemed the project uneconomic. The project had been idle since late 1991 and most site infrastructure was gone by 1995.