Bulls charge, gold bugs fly higher

The “Blackout of 2003” failed to darken the mood of investors, who pushed the Toronto Stock Exchange composite index 128.80 points higher over the Aug. 13-19 report period. The benchmark finished at 7,474.91.

Gold played its part by gaining US$6.20 in overseas trading to settle at US$362.20 on the morning of Aug. 20. Canada’s major producers all followed suit, pushing the TSE gold index 5.61 points higher to 194.44. Barrick Gold tacked on 95 to finish at $26.35, Placer Dome, 46, to settle at $18.61, and Kinross Gold, 40, to end at $9.57.

The only drags on the index were Wheaton River Minerals, which slipped 4, and Meridian Gold, which fell 71. In the previous period, the latter released a scathing independent report on its activities at the troubled Esquel gold project in Argentina, as well as an exploration update of the El Peon mine in Chile.

Junior producer Claude Resources began the period on a downward swing, only to rebound on the final day to finish at $1.55 for an overall gain of 3. The reversal reflects the release, on Aug. 18, of second-quarter financials that showed the junior as having earned a small profit on higher production at the Seabee gold mine in Saskatchewan.

Bema Gold offset an otherwise disappointing quarter by releasing encouraging drill results from its Kupol gold project in the Far East region of Russia. So far, the program has traced an epithermal vein system over a strike length of 2.8 km and to a depth of 250 metres below surface. Bema rose 17 to $2.99 on a volume of 41 million shares, making it the most active resource issue of the period.

Kirkland Lake Gold, up 24 at $3.15, announced a 45% increase in reserves and the discovery of more hangingwall mineralization at its Macassa mine in Kirkland Lake, Ont. Proven and probable reserves now stand at 1.05 million tons grading 0.47 oz. per ton.

The diversified mining and metals index rode a wave of higher nickel and copper prices, surging 5.47 points to 148.24. On the morning of Aug. 20, nickel was fixed at US$4.45 per lb., or US36 more than a week earlier, whereas copper was at US80 per lb., or US2 higher.

Inco, which has begun informal talks with union representatives at its Sudbury operations, climbed $1.38 to $34.43. Crosstown-rival Falconbridge, was up 91 at $20.70, and fellow nickel producer Sherritt International rose 9 to $4.79, gaining ground it had lost in the previous period.

LionOre Mining International rose 16, partly on the back of nickel, but also on news of improved second-quarter earnings, cash flow and production.

First Quantum Minerals and Ivanhoe Mines each set new 52-week highs during the period, with the former reaching $6.98 and the latter, $5.07. By the period’s close, both had eased back somewhat, to $6.90 and $5.03, respectively.