Trading Summary (July 20, 2004)

The Bank of Canada kept interest rates unchanged at 2% on Tuesday, but suggested that rates could rise in the fall if inflationary pressures rises. The sentiment was echoed south of the border, where the Federal Reserve Board warned that rates would be raised quickly if inflation suddenly worsens. The news helped push gold US$3.90 per oz. lower to US$401.40 in New York.

Not surprisingly, the Toronto Stock Exchange’s gold index finished 1.24 points lower at 197.44; the diversified miners were swept along to a 2.16-point loss to 226.08. Overall, the S&P-TSX composite index managed to scrape together 3.74 points to make 8,418.54.

Wheaton River Minerals was the country’s busiest mining stock with about 2.4 million shares trading 4 lower to $3.66. Wheaton recently tabled a plan to hive off its silver assets into an 80%-owned subsidiary to be named Silver Wheaton. Many market watchers see the move as an attempt to block a takeover attempt by Idaho-based Coeur d’Alene Mines. Chap Mercantile will acquire the remaining 20% of Silver Wheaton by forking over $262 million in cash and shares, and by paying US$3.90 per oz. of silver delivered by Wheaton.

The combatants on the other front of the four-way merger battle went in opposite directions; Iamgold dropped 7 to $8.23, while suitor Golden Star Resources gained 2 to reach $5.97. Golden Star recently extended its bid for Iamgold to give the Ontario Securities Commission time to consider its request to set aside Iamgold’s recently adopted, one-month shareholders rights plan.

Inco lost 12 to $44.90 after the nickel giant posted a net loss of US$14 million (or US9 per diluted share), compared with year-ago net earnings of US$64 million, (US34 per share). The loss is attributed to a US$191 million after-tax non-cash charge on its Goro nickel-laterite project in the French Pacific territory of New Caledonia. On a brighter note, Inco says commissioning of the mine and concentrator at its Voisey’s Bay nickel project in Labrador could begin in August 2005, about six months ahead of schedule.

The government in Australia’s Northern Territory recently gave Alcan the environmental green light for a planned expansion of the Gove alumina refinery. The plan calls for a near doubling of capacity to 3.5 million tonnes per year. Some 1,700 jobs will be created during the three-year construction period. Alcan has yet to issue final approval for the plan. The shares finished 35 cheaper at $52.80.

Shares in Anatolia Minerals Development plummeted 19, or 13%, to $1.26 after the company reported drill results from the Karapinar and Sin prospects in Turkey. Three holes on each prospect generally returned less than 0.5% copper and 0.3 gram gold per tonne.

Others significant sliders were, Cancor Mines , down 3.5, or more than 12%, to a quarter, and Gabriel Resources, which fell 16, or 11%, to $1.35. There was no immediate news out of either company.