STOCK MARKET — Base metals rise as golds struggle

With the exception of the gold stocks, the Toronto Stock Exchange advanced over the report period Oct. 23-29 with most sectors showing strength. The TSE 300 composite index finished the period 32.09 points higher at 5,565.08 for a gain of 0.6%, having reached a record high of 5,576.18 on Oct. 23.

The Canadian dollar backed away from last week’s gains against most other currencies. It lost ground against the U.S. greenback through most of the report period but rebounded by noon on Oct. 30 to trade at US74.57 cents. The European currencies recovered against the loony but the Japanese yen continued to trend lower.

The Bank of Canada, taking advantage of the currency’s apparent strength, cut its overnight loan rate to 3.5% from 3.75% on Oct. 28 with little effect on the exchange rates. The stock market, which had fallen away from the record close on Oct. 23, reacted to the easier monetary policy with a 2-day rally.

The London bullion markets were rough on the precious metals during the report period. Oct. 24 saw an 8 cents loss for silver, followed on Oct. 25 by losses of 80 cents for gold and $3.60 for platinum. By the morning of Oct.

30, gold was fixed at US$380.30 per oz., down $3.65; silver was at US$4.83 per oz., down 16 cents; and platinum hit the canvas at US$380.50 per oz., $7 lower than the week before.

The TSE gold and precious minerals index slid 178.94 points to 11,172.89, a loss in value of 1.6%. Most active, with 10.2 million shares trading, was Bema Gold, which released more results from its Cerro Casale property in Chile. Bema fell $1.35 to $8.15 and Vancouver-listed partner Arizona Star Resources also suffered.

TVX Gold was 50 cents lower at $10.20, Barrick Gold down 90 cents at $35.25, Placer Dome off 20 cents at $32.85, and Kinross Gold 60 cents worse at $9.75.

Euro-Nevada Mining, up $3 to $39.45, and Franco-Nevada Mining, up $4.30 to $57, escaped unhurt.

Base metals were generally stronger this week, with nickel up 4 cents to US$3.25 per lb., aluminum 1 cents higher at US63 cents per lb., and zinc 1 cents better at US46 cents per lb. Copper, which had been strong for most of the week but whose market is still easily spooked, stumbled in the last two trading days to finish 3 cents lower at US88 cents per lb.

The metals and minerals sub-index added 44.01 points to close at 5,211.68, up 0.9%. The most active base metal issue was Inmet Mining, down $1.10 to $8.35, with 5.3 million shares changing hands. The company wrote down $355 million in assets from operations such as Copper Range in Michigan, Bougrine in Tunisia, Cayeli in Turkey, and at a number of exploration and development projects, including Izok Lake in the Northwest Territories.

Also lower in active trading was Westmin Resources, which fell 25 cents to $6.20. Cameco gave up 15 cents and closed at $60.90. Most other metal miners improved: Falconbridge was 45 cents higher at $30.35, with parent Noranda unchanged at $29.20. Rio Algom added 45 cents to close at $28.10 and Cominco was 30 cents better at $31.45.

Junior explorers were led by Franc-Or Resources for the second week running, as speculation continued on the company’s Nicole gold prospect in French Guiana. Franc-Or was $1.15 higher at $4.10 and the project got a vote of confidence from Euro-Nevada Mining, which exercised a pre-existing right to buy a 1% royalty for $500,000. Franc-Or also released results from another mineralized zone on the same exploration concession.

Mirage Resources added 43 cents to finish the week at $1.50, following the release of assay results from two drill holes at its El Dorado project in El Salvador. One hole intersected 6 metres grading 30.4 grams gold and 243 grams silver per tonne, while the other cut 10.75 metres grading 26.8 grams gold and 209 grams silver.

Montreal-listed Jourdan Resources was up 29 cents to 64 cents a share, but no news was released. Also on Montreal, Bresea Resources added $1.40 to close at $13.05 after a bumpy week for offspring Bre-X Minerals, which was $3.15 higher at $23.65.