MINING MARKETS & INVESTMENT NEWS – EASTERN MARKETS — Weakness in metal prices drags down majors

Continuing threats of gold sales by the International Monetary Fund plus negative sentiment toward the Japanese economy combined to pull down most precious and base metal prices during the March 24-30 report period.

Gold prices plummetted $4.45 over the week to US$279.80 per oz. on the London morning fix of March 31, as Canadian Prime Minister Jean Chretien weighed in with his support for sales of up to 10 million oz. of the IMF’s gold reserves — an idea previously endorsed by both the U.S. president and Britain’s prime minister.

Gold’s fall took its toll on Canada’s major producers: Barrick Gold was off $2.50 to $24.80; Placer Dome sunk $1.55 to $15.85; Kinross Gold was down 19 cents to hit $3.02; Cambior slipped 5 cents to $6; and TVX Gold lost 12 cents to reach $1.88.

The recent rally in base metal prices came to an end during the report period with the release of Japanese economic data showing that a recovery in the Asian powerhouse’s economy is farther away than originally anticipated. In response, base metal prices headed south, with nickel losing 9 cents to US$2.20 per lb., copper off 2 cents to US62 cents per lb. and zinc down 2 cents to US45 cents per lb.

Almost all the base metal majors showed declines: Inco lost $1.10 to hit $19.85; Falconbridge dropped $2.20 to $16; Rio Algom sunk 80 cents to $15.50; Teck’s B shares were off 45 cents to $10.60; and Cominco fell $2.35 to $19.65. Bucking the trend was Boliden, which rose a dime to $1.90 as the major raised $123 million by completing a convertible preferred share rights offering.

Among the juniors, base metal explorer Nuinsco Resources was hammered by jittery speculators, dropping 58 cents to close at $1.32 on March 30. At presstime on March 31, shares were trading at 98 cents. Nuinsco, which had released more drill results from its Lac Rocher property in Quebec, is proving that an exploration program can be both a technical success and a stock market failure.

Calgary-based TVI Pacific jumped 5 cents to 12 cents on March 30, following the previous day’s announcement that its joint-venture partners had obtained impressive metallurgical and drilling results from their Rapu Rapu polymetallic project in the Philippines. By presstime, the junior had fallen back by 3 cents.

A sign of the times: the most active mining stock in North America was Vancouver-based Dejour Mines, which rocketed 78 cents to 95 cents. No, investors have not fallen in love with the junior’s gold prospects in the Northwest Territories, Quebec and El Salvador; rather, the trading frenzy is due to Dejour’s 5% stake in Dallas-based InternetDocuments.Com, a red-hot internet courier company.