Holiday hangover overcomes market

The holiday-shortened July 30-Aug. 5 report period was marked by more sellers than buyers, causing the Toronto Stock Exchange composite index to slip 37.81 points and land at 7,180.54.

Gold reversed course in overseas trading, turning US$6.45 southwards to fix itself at US$352.62 per oz. on the morning of Aug. 6. Similarly, silver fell US17, erasing 37% of the gains made in the previous period, and platinum eased back US$9 to US$684 per oz.

Major Barrick Gold slipped 4 to $24.25 as 13.6 million shares changed hands, making it the second-most active resource stock. The company recently announced that the negative mark-to-market value of its hedgebook had declined to US$1 billion, and that has some market watchers understandably weary.

Placer Dome, which has managed to keep its hedgebook in the black, nevertheless fell 11 as second-quarter profit and cash flow came far short of a year ago. Like many other international producers, Placer is suffering from higher energy costs and a weaker U.S. dollar.

Investors pushed Bema Gold 13 higher in anticipation of the company’s scheduled August 7 release of second-quarter results. Bema recently increased its production forecast for 2003 and 2004, and it made note of this, as well as its current exploration program, in the notice.

Junior producers Eldorado Gold and McWatters Mining also were trading magnets over the period, with the former rising 18 on 8.8 million shares and the latter falling 1 to 14 on 10.1 million shares. In the previous period, Eldorado released new projections for its advanced Kisladag gold project in Turkey as McWatters announced the impending resignation of its founder and president, Clair Derome.

Ivanhoe Mines was the biggest newsmaker of the base-metals sector, announcing it had found sufficient water resources to support a 50,000-tonne-per-day-operation at its advanced Turquoise Hill copper-gold project in Mongolia. The company hopes to mine at double those rates, so groundwater investigations continue. Ivanhoe rose 25 on a volume of 14.4 million shares, making it the most active resource stock of the period.

Noranda also saw heavy trading, though in a negative manner. The major, which recently offered US$500 million worth of new equity as part of restructuring program, fell 23 to $12.68, putting it less than a loonie shy of its 52-week low.

Junior Goldstake Explorations was the highest percentage gainer, rising 6 to 17, for a gain of 54.5% in value. On Aug. 6, the company gave Mithril Resources of Australia the right to earn a 75% stake in its Prospect D nickel sulphide project in exchange for a promise of A$200,000 in cash and A$5 million in exploration expenditures over four years.

Next on the list was Crystallex International, which jumped 48.3% in value, or $1.01. On July 30, the beleaguered company filed revised financial statements with the exchange, ending a three-week trading halt.