Mining stocks rise despite slipping gold price

The week of Jan. 26-Feb. 1 saw the price of gold fall $3.60, to US$420.90 per oz., where it closed in the afternoon in London. The gold index was down as well, falling 1.8 points to close at 196.43. The diversified metals and mining index rose 5.9 points, to 270.61 points. The S&P TSX composite index rose 1.6%, or 145 points, to end at 9,270.13 points.

Tahera Diamond led the way in volume, trading 35 million shares and ending 3 higher at 50. The company has received its Class A water licence for the Jericho diamond project. A land lease is still required before mobilization and construction of the mine, in Nunavut, can begin.

St Andrew Goldfields ended the period unchanged at 10 after 22.7 million shares changed hands. The company announced it would be offering shareholders one right for every share held. Four rights will entitle the shareholder to buy one share for 10. The company has an advanced exploration project near Timmins, Ont.

Northern Orion fell 22 to close at $3.41 on a volume of 18.9 million shares. The company did not release any news that might explain the development.

A similar phenomenon occurred when Bolivar Gold traded more than 10 million shares in one day, and again, there was no news to account for the volume. A day later, Bolivar released drill results, including one hole that cut three mineralized intervals: 54 metres (starting at 15 metres down-hole) grading 2.7 grams gold; 40.5 metres (at 84 metres down-hole) grading 8.1 grams gold; and 10.6 metres (at 137 metres down-hole) grading 11.7 grams gold. The company closed at $2.04 on Feb. 1, up 14.

Wheaton River Minerals closed up 14 at $4.05 on a volume of 20 million shares. Wheaton and Goldcorp signed a merger agreement in December 2004. Shareholders in the latter are scheduled to meet Feb. 10 to vote on the merger. Goldcorp’s offer expires Feb. 14; the company is recommending shareholders reject Glamis Gold‘s offer to buy all of Goldcorp’s shares. Goldcorp shares rose 2 over the period to close at $17.50. Glamis shares closed up 5 at $19.68.

Shares in Petaquilla Minerals rose 29%, to 67, on a volume of 977,500. Three weeks ago, Petaquilla began trenching at its Molejon gold property in Panama.

Tiomin shares soared 19% to end at 44.5 on a volume of 2.6 million. A fiscal agreement between Tiomin and the government of Kenya was to have been inked on Feb. 2. The company plans to start building the Kwale titanium mineral sands project later this year. About 80% of Kwale’s revenue will come from rutile and zircon.

Grand Cache Coal dropped 16%, to $12.69, on a volume of almost 4 million shares. Startup at the junior’s Smoky River coal field in west-central Alberta has taken longer and cost more than anticipated.

Amerigo Resources jumped 23%, to $2.20, on a volume of 3 million shares. The company is extracting copper from tailings at the El Teniente mine in Chile.