MINING MARKETS & INVESTMENT NEWS – EASTERN MARKETS — Mining issues fall in stagnant market

The Toronto Stock Exchange traded in a narrow range during the May 27-June 2 report period, with the TSE 300 composite index closing down 91.95 points to 7,534.01. Both mining sub-groups outpaced the broader market, with the metals and minerals index falling 125.90 points (or 3.3%) to close at 3,637.00 and the golds losing 362.11 points (5.4%) to close at 6,313.26.

Inmet Mining was unchanged at $5.05, with 8.4 million shares on the go. The takeover offer from Zemex appears to have stalled, since it carries the condition that 90% of shares must be tendered and the Ontario teachers’ pension fund, which holds a large block of Inmet, wants a better bid. The nickel majors were down an identical 45 cents, with Inco closing at $20.40 and Falconbridge at $16.90.

Among the golds, Kinross Gold led the volume table, with 6.8 million shares placed in good homes; the mid-tier producer, whose merger with Amax Gold has been approved by shareholders of both companies, fell 45 cents to close at $5.70. The senior golds were actively traded, with Barrick Gold down $1.20 to $27.60 on a volume of 6 million and Placer Dome off 65 cents at $17.75 after 4.6 million shares changed hands.

Apart from Kinross, mid-tier gold producers saw only light trading in the period. TVX Gold slid 15 cents to $4.60 and Cambior was 60 cents lower at $9.65. Agnico-Eagle Mines was battered by the low gold price, settling at $8.50 for a loss of $1.20, and the misery continued at Echo Bay Mines, which fell 65 cents to $3.60. Perhaps thinking there was no more misery left for Royal Oak Mines, the market only took 4 cents off the struggling producer’s shares, which closed at $1.35.

Prime Resources, with a takeout bid on the table from Homestake Mining, eased 40 cents to close at $11.20. With Homestake closing at $10.65 in New York, the takeover bid’s value is about $10.40 per share, not counting a strapping 4 cents dividend.

The most active junior was International Uranium, which saw 4.4 million shares traded. The company, which posted earnings of US$322,344 for the three months ended March 31, was down 30 cents at 60 cents. Most of the loss came on June 2, the day before the earnings were released, when the shares fell 25 cents. Heavy trading continued on June 3, with the stock trading at 59 cents on a volume of 9.6 million at presstime.

Despite a couple of “good news” releases, First Dynasty Mines fell 12 cents to 23 cents in light trading. The company recently announced that its Ararat tailings-recovery project in Armenia had shipped its first gold.

Shareholders approved a proposed $50-million public offering by Ourominas Minerals, and also ratified a change in the company’s principal business, from mineral exploration to “mining finance and investment.” Nonetheless, Ourominas was dragged down 4 cents to close at 9 cents.