Cambior revived by Japanese cash infusion

Gold dropped to a fresh 7-month low of US$272 per oz. during the April 26-May 2 report period before recovering slightly to reach a London morning fix of US$277.70 per oz. on May 3.

Gold’s rebound on the first few days of May gave a welcome boost to Canada’s major gold producers: Barrick Gold rose $3.15 to $27.65; Placer Dome gained $1.05 to $13.30; Franco-Nevada Mining eased up 30 to hit $17.55; and Kinross Gold edged up 14 to $1.95. Only TVX Gold was down, slipping a penny to 96.

Besieged Cambior rose 7 over the period to 83, and then subsequently flirted with the $1 level after the cash-strapped gold miner announced a US$5-million private placement by Jipangu, a private Japanese investment company oriented towards the gold sector. The placement consisted of 5 million units, each of which consists of one share plus a warrant to buy another share for C$1.60. If all the warrants are exercised, Jipangu will hold a 12.4% stake in Cambior.

Breakwater Resources‘ US$48-million acquisition of Cambior’s Bouchard-Hebert and Langlois zinc mines in Quebec got back on track after production resumed at Bouchard-Hebert (in March, a malfunctioning semi-autogenous-grinding mill had to be shut down). A temporary crushing plant is being installed; it will process ores at a rate of 2,400 tonnes per day, or about 83% of the normal rate. Over the week, Breakwater Resources crept up 2 to $3.15.

Rio Narcea Gold Mines slipped 6 to $1.33 as the junior announced a US$2.2-million loss on revenue of US$32 million during 1999. Last year was the first full year of operation at the company’s El Valle mine in Spain, where gold production totalled 103,785 oz. at a cash cost of US$185 per oz.

With copper prices up and zinc prices down, most of Canada’s base metal producers had a mixed week: Noranda was up a dime to $14.50; Rio Algom sank 85 to $17.55; Teck‘s B shares were up 70 to $11.15; Boliden declined 20 to $1.95; and Cominco retreated 80 to $22.80.

Nickel prices popped up above US$10,000 per tonne over the week, as the upstart Australian dry nickel laterite miner Anaconda Nickel announced it is producing at only 24% of design capacity at its Murrin Murrin nickel-cobalt operations.

Canada’s nickel miners all slumped over the week: Inco was off $1.25 to $23.85; Falconbridge declined $1.40 to $22.45; and Sherritt International dropped a penny to $3.93.

In the diamond scene, Band-Ore Resources announced the discovery of a third diamond showing at its GQ property, near Wawa, Ont. Eight microdiamonds were picked from 148 kg of samples taken from two nearby outcrops. One of the outcrops displays crater-facies rock and is coincident with several circular airborne magnetic anomalies along the shore of a lake. The lake lies 2 km from the original discovery area. Band-Ore closed up 12 at 85.