Gold slips back to low US$280s

The downward trend in gold prices that began after the U.S. started bombing Afghanistan continued through the Oct. 10-16 report period, with the yellow metal falling US$4.85 to fix at US$281.65 per oz. in London on the morning of Oct. 17.

The Canadian gold majors saw heavier trading volumes but ended the period mixed: Barrick Gold rose 40 to $26.15; Placer Dome fell 25 to $18.90; Franco-Nevada Mining rose $1.04 to $22.50; Kinross Gold dropped 4 to hit $1.43; TVX Gold declined 3 to 73; and Cambior traded up 2 to 85. Overall, the Toronto Stock Exchange’s gold and precious minerals sub-index was virtually unchanged at 5,117.67 points.

Among the most closely watched mid-tier producers, Agnico-Eagle Mines rose 49 to $15.50, Goldcorp fell 85 to $17.85, Meridian Gold dropped $1.88 to $14.80, and Glamis Gold slipped 44 to $4.20.

After the close of trading on Oct. 17, Geomaque Explorations unveiled improved grades at the Marathon Palladium project in Ontario, where the company is earning an interest from PolyMet Mining. Incorporating data from this year’s drilling, total measured and indicated resources stand at 21.3 million tonnes grading 1.32 grams per tonne palladium, 0.34 gram platinum, 0.12 gram gold and 0.4% copper, or 904,000 contained ounces palladium and 235,000 contained ounces platinum.

In the base metals sector, aluminum giant Alcan announced it would slash up to 3,640 jobs from its 52,000-man workforce in a bid to cut costs after third-quarter net income tumbled 33% to US$121 million. The company warned that its fourth-quarter earnings will fall short of expectations as a result of low aluminum prices and difficult economic conditions. Over the period, Alcan rose 95 to $47.95.

While nickel prices sagged another 4 to US$2.29 per lb., Canada’s nickel producers enjoyed strong gains over the week: Inco soared $2.55 to $22.05; Falconbridge advanced 75 to $14.90, despite announcing a $24-million third-quarter loss; and Sherritt International rose 19 to $3.99. The nickel majors’ strength helped pull the TSE’s metals and minerals sub-index 3.9% higher to 3,561.49 points.

Among the remaining base metal majors, Noranda was up 60 to $14.50; Teck Cominco‘s B shares fell 49 to $10.41; Breakwater Resources rose 1 to 23; and Boliden fell 5 to 22.

The biggest news out of the diamond sector was Ashton Mining of Canada‘s discovery of a second kimberlitic rock during fall drilling. The work is being carried out by Ashton and joint-venture partner Soquem in Quebec’s Otish Mountains. Ashton closed down 2 to 79.

In the U.S. markets, the precious metal majors had another volatile week: Newmont Mining fell 96 to US$21.91; AngloGold was up 14 to US$16.43; Gold Fields rose 3 to US$4.63; Homestake Mining popped up 16 to US$8.80; Ashanti Goldfields eased down 13 to US$3.30; and Stillwater Mining powered ahead 93 to US$22.33.

Compania de Minas Buenaventura fell $1.05 to US$19.90 even as CEO Carlos Galvez told Reuters that his company expects consolidated sales in 2001 to rise at least 9% to $150 million, not including the company’s 44% stake in the Yanacocha gold mine.

The base metals group had a strong week despite continued weakness in metal prices: Phelps Dodge jumped $2 to US$29.30; Freeport-McMoRan Copper & Gold‘s B shares rebounded $1.10 to US$10.78; BHP Billiton rose $1.13 to US$9.85; Rio Tinto roared ahead $5.65 to US$70.30; Anglo American rose $1.34 to US$13.45; and Southern Peru Copper advanced 36 to US$9.30.

Actively traded WMC rose a nickel to US$15.60 after declaring it is “in discussions with a number of parties, including Alcoa, which may lead to an offer being made to acquire all the ordinary shares in WMC or to a restructuring of WMC.” Alcoa, in turn, was up $1.20 to US$32.81.