MINING MARKETS & INVESTMENT NEWS — EASTERN MARKETS — TSE hit by weak dollar, lacklustre metal prices

A devalued Loonie and poor performances in the metals sector contributed to a dismal performance by the Toronto Stock Exchange 300 index during the report period July 22-28. The index finished the week at 7,409.43, a drop of 341.59 points. Following suit were the precious minerals and metals sub-index, which fell 258.86 points to 5,939.03, and the metals and minerals sub-group, which was off 64.21 points at 3,380.01.

Gold bullion was valued at US$291.00 per oz. on the morning of July 29 — US$3.40 less than at the end of the previous report period. Silver gained 2 cents to US$5.67 per oz., while platinum fell $6 to close at US$378.00 per oz.

Barrick Gold, weighed down by poor gold prices, plunged 85 cents to $26.40.

Other gold producers hit were: Placer Dome, off 40 cents at $16.40; Franco-Nevada Mining, off $2.45 at $27.50; and TVX Gold, off 33 cents at $3.86.

Meridian Gold fell 20 cents to $6.80, ending two weeks of gains. Meridian became a hot-ticket item after announcing it was proceeding with development of the Chilean project known as El Penon and that its balance sheet was improving. Taking into account the recent loss, the issue has jumped $2.55 in the past three weeks.

Though nickel shed 8 cents to close at US$1.98 per lb., the remaining base metals (zinc, copper and lead) each sold for a penny more per pound. This benefited Noranda, which climbed 40 cents to $24.25 but hurt Inco, which dropped 90 cents to $17.50. Inco is also suffering from recent comments made by Newfoundland Premier Brian Tobin, who fired off a list of ultimatums regarding the company’s development of the Voisey’s Bay deposit in Labrador.

He also hinted that the province would consider expropriating the ground should the company fail to comply with its demands (in particular that Inco build a $1.1-billion mine and mill at Voisey’s Bay, together with a $1-billion smelter and refinery in nearby Argentia).

Teck was down $1.25 to $14.65 on news of its weak performance in the second quarter. The company earned $3 million on revenue of $177 million, far below what it raked in a year ago. However, the company maintained a healthy cash flow of $35 million (just $2 million less than a year ago), despite limp metal prices.

Gran Colombia Resources was the most actively traded junior in the eastern markets, rising 6 cents to 23 cents on a volume 2 million shares. A U.S.-based investment company recently added 331,000 shares to the 3.9 million it already owns, increasing its ownership to 10.9%.

Also active was Lytton Minerals, which shed 11 cents to close 24 cents, with more than 1.6 million shares changing hands. The Toronto-based company continues to explore several jointly held diamond properties in the Northwest Territories and Alberta. A 30-tonne sample from the Jericho property is being processed for diamonds.