Base metals surge as golds fizzle

The Toronto Stock Exchange’s composite index continued its upward climb over the May 28-June 3 report period, ending 95.04 points higher at 6,931.25.

The gold index fared poorly despite a surge in price. The yellow metal jumped US$5.50 in overseas markets to land at a London morning fix of US$365 per oz. on June 4. Meanwhile, producers edged ahead just 0.99 of a point to finish the report period at 162.91.

Wheaton River Minerals took top-spot as volume leader, climbing 14 to $1.48 as 13.6 million shares changed hands. The mid-tier producer recorded a record US$4.1 million in earnings for the first three months of the year, versus just US$262,000 a year ago. The increase reflects the turnaround in gold prices and improvements at its Minas Luismin mines in Mexico.

Among the majors, Kinross Gold was the most active, falling 15 on the back of 11.5 million shares to end at $9.24. Barrick Gold and Placer Dome each lagged well behind, with each seeing roughly 8.7 million shares change hands, though investors tacked a penny on to Barrick’s share price, elevating it to $24.43. Placer fell 27, to $14.82.

Among diamond issues, junior Tahera continued to attract attention. Despite an absence of news, the issue was up two pennies, at 13, on a volume of 10.9 million shares.

Aber Diamond reported the biggest value change of any issue, with more than 1.7 million shares making their way $1.60 higher to $28.24. The company recently sold 42,619 carats from its partly owned Diavik mine in the Northwest Territories, reaping US$4.1 million in proceeds. Aber holds a 40% stake in the mine.

A broad upward move in base metal prices trickled down to producers: the diversified mining and metals index ended at 127.56, for a gain of 5.83 points, or nearly 5% of its value. Inco saw the most action, with 8.3 million shares changing hands. The producer has declared force majeure at its operations in Sudbury, Ont., owing to the onset of a strike. Inco says the move will end only when production resumes; in the meantime, its labour troubles have pushed nickel prices to 3-year highs, which, ironically, sent the major’s shares a penny higher, to $27.44.

The strike in Sudbury also helped to lessen the blow to Falconbridge, which announced it is slashing 85 jobs to cut costs at its Kidd metallurgical site in Timmins, Ont. Falco’s shares made $1.43 to hit $18.18.

Also making news was LionOre Mining International, which finished 61 higher, at $6 — a new 52-week high. LionOre announced plans to merge with Australian-listed Dalrymple Resources, its 40% partner in the Wildara joint venture.

Off-index issue FNX Mining released more high-grade results from its McCreedy West PM deposit in the Sudbury intrusive complex. Reported results include upwards of 101.2 grams combined platinum, palladium and gold over 3 ft. of a 10-ft. intersection of sulphide mineralization. The interval also carried 15.7% copper and 1.3% nickel. FNX finished the period at $6.60, ahead 35.