STOCK MARKETS — Yellow metal sings the blues

The Toronto Stock Exchange fell sharply over the report period ended June 11, dragged down by plummeting resource stocks. The TSE 300 composite index lost 118.19 points or 2.3%, falling to 5,106.32. Gold and base metal stocks alike underperformed the whole market, with the former hit particularly hard.

The Canadian dollar was up against all the major foreign currencies on the week, although it gained only 24 basis points against the U.S. dollar to reach US73.24 cents. It was up fractionally against the Japanese yen and sharply higher against the European currencies.

The sorrows of the gold stocks could be traced straight to the London bullion markets, where gold lost almost as much as it had the previous week. The yellow metal was down $3.45 to US$384.50 per oz. in the June 12 morning fix.

Silver faded another 9 cents to close at $5.12 per oz. and platinum gave up $3.25 for a morning price of $391 per oz.

The TSE gold index was off 1,153.02 points to 11,596.49, a 9% loss in value from June 4. Barrick Gold was off $3.30 to $38.95 and Placer Dome dived $3.35 to $35. TVX Gold was down 85 cents to $11.10, Kinross lost $1.15 to close at $10.80, and Echo Bay Mines, at $15.65, was down $1.95. Greenstone Resources, the newest face on the gold index, lost $1.40 for a close of $15.10.

Some golds had even bigger losses. Agnico Eagle Mines fell $4.25 to $22.60, Cambior lost $3.25 to close at $17.85, Pegasus Gold slid $2.55 to $17.20, and Goldcorp was off $3.25 for a close of $22.

Price-sensitive royalty companies also were hurt, with Euro-Nevada Mining down $3.70 to $58.80 and Franco-Nevada Mining down $5.50 to $84.50.

Base metal issues fell too, as copper prices swung wildly on the London Metal Exchange. June 6 saw copper fall away to $210 per tonne, then recover sharply the following day, only to lose ground again on June 11 for a net loss of 4 cents per lb. on the week and a June 12 spot price of US$1.06. Nickel also lost 4 cents to finish at US$3.52, lead was down 1 cents to US36 cents, and zinc hung tough at 46 cents per lb.

The metals and minerals sub-index was thrown for a loss of 178.35 points or 3.3% of value, closing June 11 at 5,197.55. Copper-sensitive miners lost big as the red metal’s blood flowed in Leadenhall Street. Noranda was off $1.45 to $28.20, Rio Algom shed 95 cents to close at $27, and the reddest of all, Inmet, shed 50 cents to finish the trading period at $10.35.

The nickel producers suffered too, with Falconbridge down 90 cents to $30.

Inco and Diamond Fields Resources felt a double whammy, with a slump in the nickel price and continued trouble with the Exdiam lawsuit. Inco lost $1.05 to close at $43.55, and Diamond Fields fell 75 cents to finish as $32.90.

The junior exploration companies, widely blamed in the daily press for starting the whole selloff, had another tough week. Arequipa Resources was down another $5.45 to $19.80 as more investors were thrown from the roller-coaster.

The TSE’s volume champion was Bre-X Minerals, which faded $1.25 on general market jitters to close at $23.25, with 23.5 million shares changing hands.

Montreal-listed Bresea Resources, also known as Bre-X Lite, backed away $2.25 for a June 11 close of $13.55, also on heavy volume. Another stock with routinely large volumes, Black Swan Gold, fell 11 cents to $1.18 on 8.4 million shares. Sikaman Gold, actively traded last week, lost 2 cents to close at 12 cents on 5.5 million shares.

News of drill results from the Suluk project in the eastern Northwest Territories put a dent in joint-venture partners Cumberland Resources, Manson Creek Resources and Comaplex Resources. Copper grades reported from the project were in the 1-2% range, with some nickel and cobalt values. It wasn’t enough for the market, which took $3.95 from Cumberland for a close of $3.25.

Manson Creek lost $1.70 for a close of $1.10, and Comaplex fell $1.80 to finish at $3.30.