EASTERN MARKETS — Gold prices, stocks remain volatile

It was another wild week for gold, with spot prices oscillating between the upper US$290s-per oz. and nearly US$340 before settling up US$7.75 over the week at US$325 per oz. on the London morning fix of Oct. 6.

While gold kept climbing during the Sept. 29-Oct. 5 report period, gold mining stocks paused to take a breather after the strong gains posted last period. The TSE’s gold and precious minerals sub-group eased down 92.56 points to 6,714.33 points, as most of Canada’s gold miners showed declines: Barrick Gold was off $2.10 to $32.90; Franco-Nevada Mining was off 45 cents to $30.80; Kinross Gold was down 15 cents to $4.55; TVX Gold was off 15 cents to close at $2.20. Cambior was hit worst, sliding $1.46 to $4.74 as fears surfaced that gold’s quick rise had squeezed the company through its own elaborate hedge position. At presstime, Cambior had crashed to a multi-year low of $2.83.

Bucking the trend were Placer Dome, rising 85 cents to $23.75, and several junior miners: unhedged Agnico-Eagle Mines was up $2.20 to 13.60; Goldcorp rose 80 cents to $11.15; Aurizon Mines advanced 7 cents to 90 cents; and River Gold Mines gained 30 cents to hit $2.80.

McWatters Mining soared 23 cents to 63 cents as the company received a feasibility study confirming the potential for underground mining of the East Amphi deposit, where probable reserves are pegged at 1.1 million tonnes grading 5.07 grams gold per tonne. According to the mining plan, a minimum of 45,000 oz. gold could be produced annually at a total cost of US$225 per oz.

Beyond gold, the sympathetic rise of the remaining precious metals subsided over the week, with platinum down $18 to US$411 per oz., palladium off $14 to US$382 per oz. and silver off 24 cents to US$5.47 per oz.

While nickel, copper and zinc spot prices all declined a penny to US$3.20, US80 cents and US54 cents per lb., respectively, Canada’s base metal majors were decidedly mixed: Inco, still locking out unionized workers at its Thompson division, lost 90 cents to hit $31.80; Falconbridge gained 15 cents to $21.85; Noranda rose 10 cents to $19.65; Rio Algom declined 60 cents to $20.10; Teck’s B shares fell 40 cents to close at $15.45; Boliden rose 30 cents to $3.95; and Cominco surged 45 cents to $25 on the release of more spectacular zinc-lead-silver intercepts from drilling in an area 6 miles from its Red Dog mine in Alaska.

Among the juniors, America Mineral Fields climbed 52 cents to $2.91 as Belgian giant Union Miniere acquired a 20% interest in the junior by arranging a private placement worth $22 million. AMF’s chief asset is its 30% stake in the Kolwezi copper-cobalt tailings project in Congo-Kinshasa.

Gold explorer Pangea Goldfields soared 67 cents to $3.87 as the company released drill results showing extensions at depth of its Tulawaka gold deposit in Tanzania. Pangea’s partner at Tulawaka, Minieres du Nord, fell 12 cents to $1.75.