WESTERN MARKETS AND INVESTMENT NEWS – EASTERN MARKETS — Plunging nickel, copper prices drag down majors

With the price of nickel nosediving US25cents over the past two weeks to US$2.20 per lb., both of Canada’s big nickel producers took hits over the report period ended May 19: Inco dropped $1.95 to $21.80, while Falconbridge fell $2.20 to $17.50.

With slumping red metal prices, copper sensitives were also down. Noranda was off $1.10 at $27.25 and Rio Algom slipped $2.35 to $23.05.

The most active base metal miner on the board was Boliden, which arranged a US$200-million credit line to refinance the debt of its Boliden Westmin unit. The company saw its Boliden I/R receipts fall 35cents to $1.25 and its shares 25cents to $9.30.

Over the week, embattled Inmet shot up from $4.05 to $5.05 as mica-miner Zemex announced its takeover offer of $5 cash per share. Following the announcement, Dundee Bancorp, 33% owner of Zemex, was down slightly to $25.80.

With plans being unveiled to expand its Cuban operations, Sherritt International climbed 25cents to $6.15 on news that the U.S. and the European Union had reached an agreement softening sanctions against European companies operating in Cuba. In return for not being harassed under the Helms-Burton law, the EU has agreed to refrain from subsidizing companies doing business in Cuba, Libya and Iran. It is not clear when a similar deal will be arranged between the U.S. and its partners in the North American Free Trade Agreement.

Other Toronto-listed juniors involved in Cuba were relatively unmoved by the news: Caribgold Resources fell 2cents to 53cents; Holmer Gold Mines was up 2cents to 34cents; and both Joutel Resources and Northern Orion remained unchanged at 9cents and 91cents, respectively.

Robert Friedland’s Indochina Goldfields rose 45cents over the week to $2.

The company recently took a US$90.3-million writedown on the carrying value of its gold properties and investments, of which US$40 million was related to its 80%-owned Bakyrchik gold project in Kazakstan. Other writedowns included the company’s share of London-listed BKG Resources and Indochina’s stake in the Emperor gold mine in Fiji. At its Monywa copper project in Myanmar, Indochina is set to begin producing copper cathode this July.

Noranda resumed drilling at the Caber property, 25 km west of Matagami, Que.

Property holder Southern Africa Minerals added 13cents to finish at $1.32.

Newhawk Gold was up 2cents to 25cents on news from its drill program at the Elora property, south of Dryden, Ont. A recent hole intersected 11.3 metres grading 6.4 grams gold per tonne, while another cut 4.4 metres grading 14 grams.