Placer hops on merger bandwagon

The golds once again outshone the broad market, which slipped 27.73 points over the five trading days to finish the May 22-28 report period at 7,660.58. The gold index leaped ahead 9.83 points, or 4.5%, bolstering a gain of 12% over the previous report period.

The renewed interest in gold issues reflects the rise in bullion prices, and the rally continued all but unabated during the period under review. After slipping two greenbacks on May 23, gold rebounded US$8.90 over the following four trading days to find itself fixed at US$325.20 per oz. on the morning of May 29 for an overall gain of US$6.95.

Canadian majors Barrick Gold and Kinross Gold each rose in tandem with gold, with the former climbing 70 to $35.60 and the latter edging ahead 34 to $4.17. Kinross was once again the most actively traded issue, with 40.3 million shares changing hands.

Placer Dome made its own international headlines by announcing an all-share, hostile takeover bid for Australia’s largest gold miner, AurionGold. The producer’s late dive in the consolidation pool (Barrick took over Homestake last year and Newmont Mining recently won a battle with AngloGold to absorb Normandy Mining and Franco-Nevada Mining) was frowned upon at first; but by the period’s end, the major had won over judges to gain 92 over the period, ending it at $21.73.

If the majors are the meat, the junior golds are the sauce: McWatters Mining rose 6 to 18 on a volume of 31.9 million shares; TVX Gold increased 18 to $1.84 on a volume of 26.2 million shares; Echo Bay Mines rose 50 to $1.90 on a volume of 20.5 million shares; and Eldorado Gold added 23 to $1.54. Also higher on unusually high volumes was Geomaque Explorations, up 8 to 23, and TVI Pacific, up 10 to 17.

NovaGold Resources ascended 10 to $4.38 as it announced the discovery of more mineralization at the Donlin Creek project in Alaska. Though still at an early stage of exploration, the zone is yielding encouraging grades.

The TSX’s metals and mining index see-sawed over the period, before ending it 1.3% higher, at 146.55 points. Stealing the spotlight were Noranda and Falconbridge, which swapped top-ranking executives as part of their ongoing integration. Noranda gained 26 to finish the period at $18.91, and Falco, 53 to end at $19.25.

Inco regained ground lost in the previous period, climbing $2.25 to $34.65. Expecting to ink a deal at the long-stalled Voisey’s Bay nickel project in Labrador, the nickel miner has signed on PT Aneka Tambang to help develop its nickel deposit in southeast Sulawesi, Indonesia. The estimated 10 million wet tonnes of high-grade nickel ore lie some 200 km from Inco’s nearest operation but only a stone’s-throw from the state miner’s smelter.