MINING MARKETS & INVESTMENT NEWS — Golds flex muscle in jittery markets

Attention during the report period Sept. 23-29 was focused on Washington, D.C., where the U.S. Federal Reserve Board dropped the influential federal-funds rate to 5.25% from 5.5%. The move was designed to buoy the U.S. economy and world financial markets during the current economic slowdown. Within hours, the Bank of Canada also dropped its lending rate — by 0.25%, to 5.75%.

While the rate cut took the edge off gold’s recent resurgence, the yellow metal still managed to jump $6.10 over the week to US$294.10 per oz. on the London morning fix of Sept. 30. Silver also roared back, rising 51 cents to US$5.39 per oz.

Gold stocks on the Toronto Stock Exchange posted a strong week, as the gold and precious minerals sub-index shot up 10.9% to 6,465.81 points. Among Canada’s major gold miners, Barrick was up $2.55 to $30; Placer Dome rose $2.20 to $21; Kinross Gold was up 75 cents to hit $4.70; Cambior rose 85 cents to $9.10; Prime Resources Group jumped 85 cents to $12.75; and TVX Gold climbed 73 cents to $3.88. The royalty twins also enjoyed big gains, with Franco-Nevada Mining rising $3.95 to $31.75 and Euro-Nevada Mining jumping $2.85 to $24.50.

While the TSE metals and minerals sub-index was up 2.4% to 3,007.20 points over the week, the base metal stocks were a mixed bag, reflecting little movement in base metal prices.

Noranda rose 70 cents to $22.20 as the major received government approval to distribute shares of its forestry and energy subsidiaries to shareholders as part of a plan to focus on mining and metals.

Troubled Boliden climbed 15 cents to $5.40 as the firm investigating the Los Frailes dam failure concluded that the accident was caused by the lateral movement of a 700-metre-section along a bedding plane at a depth of 14 metres. Boliden is considering suing the authors of technical reports prepared in 1977 and 1996.

Other base metal prodcuers saw movement through the week: Inco dropped 75 cents to $15.70; Falconbridge was up 40 cents to $15.65; Teck’s B shares were off 5 cents to $13.65; and Rio Algom climbed 45 cents to $19.45.

Summo Minerals shot up 19 cents to 35 cents as the Denver-based junior made major strides towards becoming a copper producer by receiving regulatory permission to develop its Lisbon Valley copper project in southeastern Utah. The proposed open-pit, heap-leach project would be capable of producing an estimated 40 million lbs. of cathode copper annually. The announcement came on the heels of Summo’s US$2.95-million purchase from Arimetco International of the Johnson Camp copper mine in southeastern Arizona. Summo believes the mine can be restarted soon, to produce 14-15 million lbs. of cathode copper annually.

Meanwhile Lytton Minerals rose 18 cents to 39 cents as the junior, along with joint-venture partner New Indigo Resources, announced the discovery of a kimberlite in the greater Jericho area in the Northwest Territories.