Trading Summary (February 11, 2003)

The golds got all Monday’s losses back in trading on the Toronto Stock Exchange Tuesday, adding 7.03 points to finish at 192.87, 3.8% higher than the previous day’s close. The broad market advanced too, with the TSX Composite index up 29.93 points to 6,474.04.

The golds were helped by a mid-day announcement from the United States Department of State saying that a soon-to-be-released audio tape would tie the Al Qaeda terrorist organization to Iraq. That spooked a rally that had formed early in the day and drove investors into gold stocks. Gold bullion prices, though, didn’t get the same jump from the news, with prices fixed at US$364 per oz. in the London afternoon session and closing trades in the US$362 range on the Comex.

Almost all the companies on the gold index rose, the only exception being Gabriel Resources, which fell 15 to $4.28. As it was the only one that didn’t lose ground the previous day, the loss only evens things up.

There was heavy trading — 19.4 million shares worth — in Kinross Gold, which was picked for the Standard & Poors TSX 60 index, and will consequently be added to some exchange-traded funds and mutual funds that track the index. Kinross was up 98 at $11.55.

Another big gainer was Glamis Gold, which rose $1.08 to $18.33, and rival Meridian Gold nearly paced Glamis, rising $1.07 to $23.84. Gains today, like the losses yesterday, were more muted in the big producers, with Barrick Gold up 68 at $25.25 and Placer Dome tacking on 32 to finish at $17.05.

Over in the base-metal world, the signs of conflict had less effect, but the TSX metals and mining index picked up 0.27 point to finish at 131.22. Noranda, which announced a $700-million loss in the fourth quarter, fell 20 to $13.72. The loss included a $630-million writedown in the value of the Magnola magnesium plant in Quebec, and $81 million in other one-time provisions.

The big winner on the day was Inco, which was up 85 at $32.20. Coal producer Fording, which announced a loss of $119 million in the last quarter of 2002, slid 13 to $33.58.

Canada’s junior exchange ended the day virtually unchanged as investors found little reason to trade stocks. The S&P-TSX Venture Exchange composite index lost 0.26of a point and closed at 1,094.48.

American Bonanza Gold Mining ended the session at 32, up 1 on nearly 700,000 shares. Stock in the junior has traded heavily since Toronto-listed Goldcorp reported that it has taken a 10.4% stake in the junior by being the largest buyer of an 18.3 million unit private placement priced at 22 each. A unit holds one share and one half a warrant, which is exercisable at 28 for a year.

Diadem Resources added a penny to close at 6 on 563,500 shares. The cash-strapped junior holds ground in northern Ontario, California, Mexico, Northern Quebec, Indonesia and Nicaragua.

Holmer Gold Mines lost 2 to close at 19 on 441,500 shares. The company recently closed a $390,060 non-brokered private placement of flow-through shares and warrants. The financing comprised 2.17 million units priced at $0.18 each. A unit consists of one flow-through share and one warrant, each warrant exercisable at $0.30 in the first year and at $0.50 in the second year. The funds are ear marked for a feasibility study on its wholly owned Timmins gold project in northern Ontario.

Investors continued to show an interest in Goldminco. The company is currently in the midst of a 1,000 metre drill program on the Balabag gold-silver property in the Philippines. Shares in the junior ended the session at 14, down a penny, on a volume of 446,500.