Yellow metal loses lustre

The Toronto Stock Exchange tacked on another 55.02 points to end the Dec. 13-19 report period at 11,1554.28. The gold index did well, slipping just 0.67 of a point to 236.32 as US$27.75 was carved from the yellow metal’s hide; gold ended the week at US$508.75 per oz. in London amid profit taking and a stronger greenback. The diversified miners continued 2.38 points lower to 378.21 as the base metals, save for nominally higher copper, suffered losses.

Soon-to-be diamond producer Tahera Diamond was the busiest miner, with more than 29 million shares advancing 9 to a new 52-week high of 70. A recently completed $9-million, flow-through financing will fund exploration in 2006. Work will focus on the diamondiferous Muskox kimberlite in Nunavut, where the company can earn up to a 75% stake from partner De Beers. Tahera’s nearby Jericho diamond mine is slated to begin producing in early 2006.

A trio of gold producers followed quickly on Tahera’s heels, with Bema Gold standing out as the loser. Investment bank Seymour Pierce recently downgraded Bema from buy to underperform; the issue dropped a dime to $3.26. Kinross Gold and Eldorado Gold continued higher, adding 29 and 30, respectively.

Kinross can take up to a 75% stake in Lincoln Gold’s Jenny Hill gold property in western Nevada’s Walker Lane by spending US$3 million, completing a feasibility study, and arranging mine financing. The project is situated between two former producers, and has yet to be drilled. Subsequent to the period’s end, Eldorado tabled an inferred resource of 8.7 million tonnes averaging 61.5% iron for the Vila Nova property in Brazil’s Amap state. The company says it has already received expressions of interest to purchase potential future production. Kinross finished at $9.77, Eldorado, at $5.08.

Sparring majors Placer Dome and Barrick Gold remained in the news; Barrick recently won regulatory clearance for its unsolicited US$9.2-billion bid for Placer in Canada, the United States, Germany, Switzerland, and Australia. South African approval is expected soon. Meanwhile, Placer continued the spit-and-polish routine, announcing an extension of Goldcorp‘s Red Lake High Grade zone downdip onto its neighbouring Campbell mine. As a cash contributor to Barrick’s takeover offer, Goldcorp stands to pick up Campbell. Placer ended 59 cheaper at $25.81, while Barrick dropped 14 to $31.64. For its part, Goldcorp shed 89 to $23.05.

In the odd news department, Shore Gold recently discovered that confusion between imperial short tons and metric tonnes had been short-changing grades at its diamond processing plant at the Star diamond project in Saskatchewan. Squaring the errors boosted the grade of 31,787 tonnes of material from the pipe by 10% to 16.3 carats per hundred tonnes. Shore said the plant’s belt-scale weightometer had been installed with imperial units set as default.

Grande Cache Coal advanced an impressive 94 or 45% to $3.02, after securing a $20-million credit facility to repay an earlier loan and finance working capital. The facility matures on April 8, 2006. Canarc Resources rose 15 or 43% to 50, after an 8-hole infill drilling campaign yielded a weighted average of 14.2 grams gold per tonne over 8 metres from the C vein system on the New Polaris property in B.C.

Farther afield, drilling on Tan Range‘s Luhala gold project in the Lake Victoria greenstone belt of Tanzania has expanded mineralization identified at Kisunge Hill last year. The drilling also encountered six new kimberlite pipes near previous alluvial diamond finds. The issue jumped $1.53, or 38%, to $5.55.