Broad market recovers on buying spurt

Buyers outpaced sellers over the Jan. 28-Feb. 3 report period to push the S&P-TSX composite index up 72.55 points. The benchmark finished the week at 8,660.70.

Gold had a rather bi-polar week, soaring then sinking to settle at US$401.75 per oz. on the morning of Feb. 3, for a loss of US$2.25 on the five trading days. As in the previous period, palladium was virtually the only metal that shined, rising US$5 to US$228 per oz.

Barrick Gold, which slipped 39 to $26.39, is taking a smaller stake in Russian-based Highland Gold Mining, having agreed to buy another 9.3 million shares to raise its stake to 17%, or 41% less than previously planned. The major has now decided to invest directly in the country’s mines.

Iamgold rose a quarter, to $9.25, despite announcing its failure to meet revised operating forecasts for 2003. Still, attributable production rang in at 421,000 oz. and weighted cash costs, at US$225 per oz. — only 2% lower and 5% higher, respectively, than predicted.

Bema Gold had a fairly rough week, though it managed to recover somewhat by the period’s end, when it announced a preliminary resource estimate for its Kupol project in Russia. At a cutoff grade of 6 grams gold, the Big Bend and Kupol Vein zones contain 3 million indicated ounces and 6 million inferred ounces, plus significant silver credits. Bema fell 15 to $4.12.

Overall, the gold and precious metals sub-group slipped 1.73 points to end the period at 205.32.

A slew of bad news sent the diversified metals and mining sub-group down 8.86 points, or 4% by value, to 210.24. The worst-hit was Ivanhoe Mines, which saw nearly 22% of its value disappear, or $2.14 per share, on a volume of about 15.8 million shares. The company released an independent scoping study that suggests its Turquoise Hill copper-gold project in Mongolia is robust, assuming infill drilling pans out.

Falconbridge crashed $2.49, for a loss of 7.5% in value, after 80% of its workforce in Sudbury walked off the job and on to the picket line. Accordingly, the major has shut down four mines and a mill in the camp, while reducing its smelting capacity to between 40% and 50%.

Also reporting bad news was Inmet Mining, which reported a significant reduction in output at its 18%-owned Ok Tedi copper mine in Papua New Guinea. A mechanical failure of one the mine’s two semi-autogenous grinding mills will cut production in half over the next two months. Inmet ended the period at $15.60, off a dime.

Tahera once again took first prize in the most-active race, rising 2.5 on a volume of about 21 million shares. The would-be diamond producer ended the period at 42.5.

Cumberland Resources rose 19 to $4 on news it had delineated more ounces at its Meadowbank gold project in Nunavut. Measured and indicated resources now stand at 21.7 million tonnes grading 4.3 grams gold per tonne.