Broad market surrenders to war as golds rebound

Shell-shocked investors stripped another 49.49 points off the S&P/TSX composite index over the March 26-April 1 report period as the war in Iraq dragged on. The benchmark finished the period at 6,335.12.

Gold recouped some ground, advancing US65 over the five trading days to land at a London morning fix of US$330.25 per oz. on April 2. Silver also made headway, rising two pennies to US$4.40 per oz., but platinum and palladium both retreated.

Producers of the yellow metal rose with their product, pushing the gold sub-group up 7.33 points, to 153.99. Placer Dome, which reported a trimmer hedge book, was the most active major, rising 93 to $13.98 on a volume of nearly 16 million shares. Barrick Gold was up 87 at $22.40 as 11.5 million shares changed hands, and Kinross Gold ascended 80 to $8.70 on a volume of 11 million shares.

Fledgling mid-tier miner Wheaton River Minerals took a light beating on heavy trading, easing back a nickel on a volume of nearly 22 million shares, making it the most active resource stock. Wheaton recently acquired the Peaks gold mine in Australia and a quarter-stake in the Bajo de la Alumbrera copper-gold mine in Argentina. It has since inked a deal with London-based BHP Billiton to acquire another 25% in Bajo de la Alumbrera for US$180 million. It paid US$210 million to Rio Tinto, also London-based, for its initial stake.

Inco was the most active base metal producer, falling 60 as nearly 9 million shares changed hands. The nickel giant announced its intentions to reedem all its outstanding Series E preferred shares and its convertible debentures due 2004 at a total cost of US$655 million. Also working against the company was a US25 drop in spot nickel, which was fixed at US$3.52 per lb. on the morning of April 2. Inco finished the period at $27.

The other big producers were a mixed bag: Falconbridge fell 50 to $16; Cameco rose $1.20 to $40.40; Teck Cominco‘s B series fell 19 to $10.96; Sherritt International climbed 15 to $4.64; Noranda fell 69 to $12.27; Ivanhoe Mines rose 40 to $3.25; LionOre Mining slipped 36 to $5.24; and Aur Resources slipped 34 to $3.51. Overall, the diversified mining and metals sub-group fell 2.04 points, or 1.6%, to land at 122.58.

Off-ticket item Inmet Mining announced an extension to its Troilus gold mine in north-central Quebec. Reserves are now sufficient to feed the mill until 2010. Inmet rose 24 on the news to end at $6.49.

Junior Northern Orion Explorations was the second most active issue, gaining 3 on a volume of 17.6 million shares. In late March, the company raised $4 million by privately placing 40 million units. A unit consists of a share and a warrant that can be exercised at 13 over the next two years, and the shares can not be openly traded until mid-July. Proceeds are earmarked for the Agua Rica copper project in Argentina, in which the company can earn a 72% stake from BHP Billiton.