Trading Summary (October 29, 2003)

World equity markets largely held on to the past couple of days’ gains in trading on Wednesday. In Toronto the TSX Composite index crawled up 11.31 points to finish at 7.730.48. But it was also a day for hard assets, as the TSX Mining and Metals index was the leading gainer, picking up 5 points or 2.8% of value to close at 184.54. The TSX Gold index was close behind, up 4.82 points or 2.4% at 209.84, and the TSX Materials index — the golds, base metals, chemicals and forest products sectors — made the third-best gain, picking up 1.94 points to close at 136.49.

Almost all the base metal stocks jumped today, with Sherritt International, down 15 at $4.90 on a volume of 4.7 million shares, the lone exception. Sherritt proposed to exchange half its $600 million in convertible debentures bearing interest at 6% for $300 million in longer-term convertible debentures at a rate of 7%.

Sherritt aside, healthy increases in the nickel price (which closed at US$11,420 per tonne on the London Metal Exchange) brought buyers into the other nickel producers. Inco was $2 higher at $41.35, a gain of over 5% on the day, Falconbridge vaulted 70 to $23.80, and LionOre Mining International was 13 higher at $7.40 on a volume of 3.4 million shares.

Ivanhoe Mines was the big gainer, picking up $1.14 and closing at $12.37. There was no news from the company, but Barrick Gold showed interest in Ivanhoe’s Mongolian backyard by taking up a 9.5% interest in Venture-listed junior QGX, which has a large land package near Ivanhoe’s Turquoise Hill project, and a carried interest in three Ivanhoe properties in the area. Barrick was up 32 at $25.70.

Elsewhere on the gold index, there was general buying as prices moved higher on bullion markets. The London afternoon fix of US$385.40 set the stage for New York afternoon trading that left gold in the high US$386 range, a gain of US$3.70 on the day.

Star of the equity show was Golden Star Resources, up 62 or 8.9% to close at $7.57. Another small producer, Eldorado Gold, rose 33 to $4.75, while Iamgold led the mid-tiers, rising 57 to $9.99. Kinross Gold, 34 higher at $10.82, was the best of the seniors, while silver producer Wheaton River Minerals was the most actively traded stock on the index, rising 13 to $2.86 on a volume of 8.6 million shares.

Off the index, Queenstake Resources had another 10-million-share day, falling a penny to 61. Zinc producer Breakwater Resources gained 6 to close at 66 on a volume of 2.2 million. Coming off a buying frenzy from its recent Eritrean exploration success, Nevsun Resources fell 42 to $8 with 1.9 million shares changing hands.

Canada’s junior exchange moved solidly to a new all-time high as investors continued to gobble up speculative issues. The S&P-TSX Venture Exchange composite index surged 34.05 points, or 2.2%, and closed at 1,532.60.

Investors continued to be attracted to Sparton Resources. The junior recently reported that kimberlite indicator minerals have been found in till samples taken from its 100% owned property located in the Otish mountains of northern Quebec. Following the news the junior agreed to sell two million special warrants at a price of $0.43 per unit. Each special warrant holds one share and one warrant. The warrants are exercisable at $0.54 for a period of two years. Sparton ended the day at 87, up 16 on 3.8 million shares traded.

Moving to stratospheric heights, Pacific Minerals added 72 to close at $3.56 on over 2.1 million shares traded. Shares in the junior have nearly doubled in the past week following a newly restructured deal that will allow Pacific Minerals to retain at least 50% of its flagship Chinese projects. Toronto-listed Ivanhoe Mines has elected to reduce its maximum earn in rights for the 217 and Dangong gold projects, as well as the JBS platinum-palladium project to 50% from the previous 80%. The company has also agreed to transfer to Pacific Minerals a 50% of its interest in the Shuteen exploration licence in southern Mongolia. The 93-sq. km property lies 100 km east of Kharmagtai. Ivanhoe acquired the right to earn an 80% interest in Shuteen in early 2002 by spending US$1.5 million the end of 2004. So far, Ivanhoe has spent US$1.4 million on the project. In return, Pacific Minerals will issue Ivanhoe 2.5 million shares.

QGX made a nice move following news that Barrick Gold would invest in the Mongolian explorer. Shares in the junior added 69, to close at $5.69 on a volume of 906,700.