MINING MARKETS & INVESTMENT NEWS — EASTERN MARKETS — Gold reaches 20-year lows during summer slump

Gold prices touched new 20-year lows during the July 7-13 report period, losing 60 cents to hit US$255.60 per oz. on the London morning fix of

July 14.

Although there was relatively little activity in the gold market, the week saw a rise in the political backlash against proposed gold sales by the

U.K. treasury and the International Monetary Fund.

Bobby Godsell, chief executive of South Africa’s Chamber of Mines and head of Anglogold, and James Motlatsi, president of that country’s National Union of Mineworkers, travelled together to London to lobby against Britain’s planned sale of 415 tonnes of gold reserves, of which 25 tonnes were sold the previous week.

“Our industry is under attack,” they said in a joint statement. “This is a time for all South Africans, indeed all Africans, to stand together in defence of gold and the industry it supports.”

For a variety of reasons, several U.S. congressman are beginning to voice their opposition to the IMF’s plan to relieve Third World debt through gold sales.

Gold’s woes dragged down Canada’s major producers: Barrick Gold was down $1.35 to $25.80; Placer Dome dropped $1.20 to $14.90; Kinross Gold was off 5 cents to $2.35; Cambior dropped 45 cents to hit $4.50; TVX Gold lost 14 cents to close at $1.14; Franco-Nevada Mining was down 95 cents to $21.15; and Euro-Nevada Mining dropped 90 cents to $16.20.

Among the base metal miners, Falconbridge rose 20 cents to $21.20 as 750 members of the Canadian Auto Workers union at the Kidd Creek metallurgical division in Ontario hit the picket lines over issues related to job security and seniority.

The remaining majors were a mixed bag: Inco shed 5 cents to hit $26.10; Sherritt International lost 12 cents to fall to $3.18; Noranda was up 75 cents to $20.20; Rio Algom gained 75 cents to $21.90; Teck’s B shares fell

90 cents to close at $12.20; Cominco slipped 40 cents to $24.90; and Boliden gained 2 cents to reach $3.52.

Zinc miner Breakwater Resources was up 30 cents to $2.98 on the back of stronger zinc prices and the release of promising drill results from new areas of the El Toqui zinc-gold mine in southern Chile. The drilling extended the Dona Rosa deposit and uncovered significant mineralization 3 km west of the mine.

A shaky ceasefire in the Democratic Republic of Congo stirred activity in the few juniors still nominally active in that country. America Mineral Fields, co-owner of the Kolwezi copper-tailings project, closed up 45 cents to $1.85; Tenke Mining, co-owner of the Tenke-Fungurume copper project, slipped 18 cents to $1 on heavy trading; and CDN-listed Banro Resource remained in the US72 cents range. At presstime, the three main Congolese rebel groups, who had refused to endorse the ceasefire, were granted an amnesty by DRC President Kabila.