TSX takes a breather as gold cools

The Toronto Stock Exchange’s S&P TSX Composite Index pulled back from its recent highs to end the March 9-15 report period 194.03 points lighter at 9,709,27. The gold index drifted 4.38 points south to 209.91 as the yellow metal returned mid-period gains to close just US$1.15 higher at US$440.65 per oz. in the afternoon in London on March 15. The diversified crowd gained 6.3 points to reach 321.77 as the base metals ended on a mixed note.

Noranda and Falconbridge took centre-stage during the report period, announcing plans for a $14-billion merger that would see Noranda acquire the 40% of Falco’s shares it does not already own. Noranda ended $1.45 better at $24.75, while Falco climbed $4.66 to a new 52-week high of $43.81.

Asia Pacific Resources dropped two pennies to 17 in busy traffic after representatives informed investors, via a conference call, that the approval process for the mining lease at the Udon South potash project in Thailand was progressing slowly. The company originally expected to receive the lease by late 2004.

News of a loss of US$22.1 million in 2004 sent shares in Queenstake Resources 7.5, or 20%, lower to 29.5. The company also saw its CEO, Chris Davie, resign because of health problems. Likewise Northern Orion Resources slipped 41, or 10%, to $3.60 after reporting a fourth-quarter loss of US$16.5 million. The shortfall reflects a US$22.2-million writedown of Orion’s half-interest in the Mantua copper-gold project in Cuba.

Shares in Barrick Gold slid 78, to $30.82. The major recently began pouring gold at its 70%-owned Tulawaka mine in Tanzania. The mine is expected to add 70,000-75,000 oz. gold, at a total cash cost of US$210-220 per oz., to Barrick’s account in 2005. Northern Mining owns the balance of the mine, which is slated to crank out 110,000 oz. in 2005. Barrick’s partner gained 4 to make 66.

In other news, the Globe and Mail reported that a New Orleans court had ordered Barrick and J.P. Morgan Chase & Co. to settle a lawsuit filed by coin and bullion dealer Blanchard & Co. in late 2002. Blanchard has accused the two of colluding to rig the gold price and monopolize bullion trading.

Fellow gold miner Iamgold finished 49 cheaper at $8.20 after seeing fourth-quarter earnings more than halved to US$2.9 million. The reduction is due to costs related to Iamgold’s failed bid for South Africa’s Gold Fields. Meanwhile, the company’s gold output increased slightly to 432,000 oz. at US$323 apiece in 2004.

In diamond news, Tahera Diamond stayed on investors’ radar screens, with nearly 25 million shares making their way 4 lower to 53. The company trimmed its loss to $2.5 million in 2004, compared with a loss of $20.6 million in 2003.

Aber Diamond nearly doubled its earnings to US$53.1 million in 2004. Reserves at its 40%-owned Diavik mine in the Northwest Territories were 37% higher than what was reported in a 2000 feasibility study. Profit-takers pushed the issue $2 lower to $39.35.