Golds nosedive but base metals stay afloat

The Toronto Stock Exchange moved modestly higher during the report period July 25-31, adding 103.18 points to finish at 7,689.69, for a gain of 1.4%.

Base metal shares outpaced the broad market with a 3.4% gain, picking up 134.82 points and closing at 4,094.26. Moves by heavyweights Alcan, which rose $2.63 to $57.55, and Inco, which rose 74 to $25.74, drove the index higher, but gains were general through the whole group. Falconbridge was up 41 at $16.91, Cameco was 33 higher at $30.53, and Sherritt International edged up 20 for a close of $4.95.

On the down side, Noranda slipped back 34 to $15.91, Aur Resources was down 15 at $2.60, and LionOre Mining dropped 10 to close at $2.08.

Gold backed off from the previous week’s price, fixing at US$267.70 in the London morning session on Aug. 1. The white goods continued to take hits, with platinum off US$32 at $470 per oz. and palladium slumping a further US$8 to finish the period at US$460 per oz.

Despite the weakness in palladium prices, North American Palladium clawed back $1.69 to close at $10.50, almost erasing the previous week’s losses. Much of its production is already sold forward at prices in the US$900-per-oz. range.

The golds fell back, shedding 303.88 points to finish the period at 4,496.36, down 6.3%. The heaviest trader on the gold index was its non-gold player, Teck, whose B-series shares slid 56 to finish at $11.67. Altogether, 7 million Teck B shares were on the move during the five trading days.

Another heavily traded senior gold was Placer Dome, which was off $2.35 at $15.35, while Barrick Gold slid $1.40 to close at $22.70.

Kinross Gold, off 9 at $1.20, announced it had abandoned an appeal to keep its listing on the New York Stock Exchange. The American Exchange opened a spot for both Kinross and its Kinam share series, an outgrowth of the merger with Amax Gold.

Weakness was widespread in the gold group, with several recent high-fliers coming back to earth, particularly the rumoured takeover targets among the mid-tier producers. Goldcorp was down $1.11 at $15.10, Agnico-Eagle Mines was off 14 at $12.71, Echo Bay Mines sank 9 to $1.41, and Glamis Gold fell 47 to $4.33. Alone among the mid-tier gold miners, Meridian Gold picked up $1.59 to finish at $13.50, with 2.3 million shares changing hands. The stock recently received some attention from precious metals funds.

Smaller gold producers off the index did little better. Richmont Mines was hit for a 40 loss, closing at $1.35, after a $4.2-million writedown on the carrying value of its Nugget Pond mine in Newfoundland earned it a $4.4-million second-quarter loss. Quintessential narrow-vein miner River Gold was off 9 at $1.01 and Aurizon Mines slid 1 to 31.

Cambior fell 7 to 67, following weak second-quarter results.