Gold saw a little price action during the Jan. 17-23 report period as the Bank of England completed another gold auction, selling 803,600 oz. at US$268 per oz., with an over-allotment of 4.8 times.
Over the week, gold prices moved US$2.60 higher to US$265.70 per oz. on the London morning fix of Jan. 24.
The big story among Canada’s gold majors was Placer Dome‘s US$209-million writedown applied to the fourth quarter. Mostly, it related to three properties: Porgera (US$111 million), Getchell (US$66 million) and Osborne (US$32 million). The bad news didn’t end there, as Placer also slashed its reserve base to 47 million oz. at the end of 2000 from 65.9 million oz. at the end of 1999, and lowered its long-term outlook for gold by US$25 to US$300 per oz. Over the week, the company gained 55 to $13.60, but fell to $12.85 after the announcement.
Among Canada’s remaining gold majors: Barrick Gold rose 70 to $24 as rumours circulated that it might team up with AngloGold to buy Gold Fields; Franco-Nevada Mining slipped 10 to $16.50; Kinross Gold was unchanged at 76 as it reported impressive drill results from gold exploration near its Kubaka mine in Russia’s Far East; TVX Gold fell 8 to $2.65; and Cambior was off a 4 to 52.
Gold junior Semafo received a 10-year mining licence for its Jean-Gobele permit in Guinea, West Africa. Construction is due to begin in the first quarter, with production at the annual rate of 60,000 oz. gold expected by year-end. Semafo fell 3 to 37.
The talk of Canada’s base metal producers was Cominco, which shot up $2.10 to $23.25 as it announced further cutbacks to zinc production at its Trail facility. Instead, Cominco is shrewdly stepping up its lucrative electrical power sales to brown-out-plagued California. Cominco will redirect power generated at the Waneta dam on the Pend Oreille river. The B shares of Cominco’s parent, Teck, also rose 10 to $13.15.
Alcan Aluminium climbed 70 to $53.60 as it reported fourth-quarter earnings of US54 per share. The figure was in line with diminished expectations linked to the slowing of the U.S. economy. Market-watchers expect aluminum demand to be particularly hard-hit in the transportation and construction sectors.
The rest of the base metal miners were mixed in a quiet week prior to the beginning of earnings season: Inco rose 11 to $23.10; Falconbridge shed 20 to $16.05 as it halted some production at Kidd Creek in response to ground movement; Sherritt International was up 15 to $4.54; Noranda fell 15 to $14.90; Boliden was up 8 to $1.20; and Breakwater Resources was unchanged at $1.38.
Summo Minerals rose a penny to 8 and was trading at 10 at presstime, following its A$5.9-million acquisition of a 48% stake in Matrix Metals, an Australian-listed copper producer. Matrix operates the 5,500-tonne-per-year Mt. Cuthbert open-pit, heap-leach solvent-extraction electrowinning operation in Queensland.
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