Constellation goes supernova

The Toronto Stock Exchange’s S&P-TSX composite index rose steadily over the Feb. 25-March 2 report period, ending 170.7 points higher at 8,808 despite a 1.5% drop at the period’s end. The gold index mirrored that performance, but managed to evade gold’s continued slide by clinging to 0.7 of a point from earlier gains to make 209.89. The yellow metal yo-yoed itself US$4.50 lower to US$395.75 per oz. in the afternoon in London on March 2. Nickel reversed course to regain US$220 to end at US$14,740 per tonne. The diversified metals and mining index responded by jumping 14.59 points, or 6.6%, to 236.2.

Constellation Copper went supernova mid-period with more than 117 million shares traded on Feb. 27 alone. The company’s major shareholder, Resource Capital Funds I and II, collectively sold 102 million shares, or a 14% stake, to retain a 27% interest. Constellation later announced it had abandoned its planned acquisition of the Hinoba-an copper-gold-molybdenum porphyry deposit on Negros Island in the Philippines. A Supreme Court ruling there has called into question the validity of the commercial interest in the property. The company was consulting with its legal council at presstime. Constellation shares ended a penny higher at 13.

The Resource Capital Funds recently sold 5.6 million shares of Southern Cross Resources, only to exercise 6.3 million warrants under a previous agreement to bring their holdings to 16.3 million shares. More recently, Southern Cross began a 60-hole drill campaign aimed at filling in its Honeymoon uranium project in South Australia. Southern Cross put in a nice percentage increase, climbing 34, or more than 25%, to $1.68.

Other big percentage gainers were Golden Queen Mining, up 25, or 45%, at 75, off an intra-period high of 90, and International Uranium, which soared 80, or 37%, to $2.95. There was no immediate news out of either company.

Tahera finished 5.5 higher at 47.5. The Nunavut Impact Review Board has released its final report outlining the terms and conditions for its approval of the Jericho diamond project. The report concludes that the project will produce significant economic benefits.

Turning to the major gold producers, Placer Dome managed to hang on to mid-period gains finishing a quarter higher at $22.15. The company recently posted sharply higher fourth-quarter earnings of US$81 million (or 20 per share), owing mostly to a non-cash tax asset totalling US$72 million for previously unrecorded tax benefits related to its U.S. operations. Kinross Gold finished the final stanza of 2003 with earnings of US$32.2 million (9 per share), a far cry from the US$14.7 million (12 a share) it lost a year earlier. The issue slipped 18 to $8.95. Barrick Gold rounded out the trio with a 22 drop to $26.85.

Falconbridge added $3 to end at $36.55. The company averted another strike at its nickel operations in Sudbury by signing 220 unionized office, clerical and technical employees to a new 3-year labour contract.