TSX roars despite gold’s withdrawal

Buyers outpaced sellers over the Feb. 12-18 report period to push the Toronto Stock Exchange composite index up an impressive 118.51 points, finishing at 6,592.55.

Gold, which had soared of late, was yanked back to earth, and that spelt bad news for producers. Placer Dome took the biggest hit among the seniors, falling $1.13, to $15.92, on a volume of 13.4 million shares. Barrick Gold, though more heavily traded, on a volume of 14.3 million shares, fell only 90, to $24.35, while Kinross Gold slipped 26 to $11.29. Gold itself tanked US$15.95 to settle at a London morning fix of US$347.20 per oz. on Feb. 19.

The dyanamic trio also lost ground: Meridian Gold fell $1.61 to $22.23; Agnico-Eagle Mines lost 62 to finish at $20.38; and Goldcorp slipped 61, to $17.69. Also considerably lower was Glamis Gold, which sank $1.10, to $17.23, despite having announced a considerable jump in annual profits and cash flow on the back of higher production and lower cash costs.

Junior producer Geomaque Exploration, which rose a penny to 8, announced a considerable decrease in losses last year over 2001 losses. The company has meanwhile raised enough funds through a private placement to offset its sizable working capital deficit.

Producer wannabee NovaGold Resources edged closer to realizing its dream with the back-in of Placer Dome at the Donlin Creek project in Alaska. The major exercised its back-in right for a 40% interest, which, among other things, requires it to build a mine in five years that is capable of churning out 600,000 oz. annually. Despite the good news, NovaGold slipped 38 over the period to finish at $4.30.

Copper lost the most ground among the base metals, easing back US3 to a London morning fix of US74 per lb. on Feb. 15. Metal traders shaved US2 off a pound of nickel and US1 off a pound of zinc. Lead remained on a strict diet.

The senior producers were a mixed bag: Inco dropped 40 to $31.80; Noranda climbed 18 to $13.90; Teck Cominco‘s B-series slipped 33 to $11.97; and Falconbridge remained unchanged at $16.80.

First Quantum Minerals jumped 47 on news it had tabled a positive independent feasibility study of its Kansanshi copper deposit in Zambia. The project promises to triple the company’s annual cathode output to 90,000 tonnes, provide it with sizable volumes of copper concentrate, and diversify its production profile to include gold. First Quantum ended the period at $4.67.

Junior Northern Orion was the most active issue in the resource sector, rising 3 on a volume of 27 million shares to end at 15. The company inked a binding agreement with a subsidiary of BHP Billiton to purchase that company’s stake in the Agua Rica copper-gold-molybdenum project in Argentina and thus become its sole owner. For US$12.6 million, the junior gets 750 million tonnes of resources grading 0.99% copper-equivalent. The first instalment of US$3.6 million is due in late April; the rest, in mid-2005.