Gold shines as Iraqi stalemate continues

Profit-takers outnumbered investors over the Dec. 4-11 report period, causing the Toronto Stock Exchange composite index to lose 43.41 points. The index finished the week at 6,597.20.

Gold, buoyed by new warnings from the U.S. of impending war with Iraq and by the temporary seizure of a Korean vessel carrying Scud missiles to Yemen, rose US$3.05 to a London morning fix of US$323.75 per oz. on Dec. 11. The yellow metal’s rise, in turn, pushed the TSE’s gold index to 175.54 points, for a gain of 1.7%.

Iamgold was the star of the group, ballooning 14%, or 73, to $5.90. The company’s proposed merger with Repadre Capital has passed a due-diligence review, so the decision now rests with regulators and Repadre shareholders. A shareholder vote is scheduled for Jan. 6. Repadre also spiked on the news, to $9.32 from $8.11.

Next came Glamis Gold, which soared 8.2%, to $14.06, on news it had raised $23.9 million. A syndicate of underwriters that had raised $159 million for the company a few weeks back exercised an over-allotment option for 1.8 million shares.

Kinross, too, rose on news of having closed an equity financing. The producer sold 50 million units at $3.05 apiece, with a unit entitling the holder to a share and half a warrant. A full warrant can be exchanged for an additional share until December 2007 at $5. Kinross rose 12 to $2.88 as more than 31 million shares changed hands, making it the most active of the bunch.

Among the others: Agnico-Eagle Mines soared $1.42, or 7.7%, to $19.81; Bema Gold climbed 13, or 7.7%, to $1.82; Goldcorp rose 53, or 3.2%, to $17; Meridian Gold ascended 21, or 0.9%, to $24.1; and Placer Dome edged ahead 13, or 0.8%, to $15.68. The only anomaly was Barrick Gold, which slipped 70 to $23.15.

Fording was the most active base metal issue, slipping 15 to $32.60 on a volume of 9.6 million shares. The coal miner has signed a deal with Teck Cominco and Westshore Terminals Income Fund whereby shareholders can exchange their shares for $34 per share in cash or units in a trust fund to be formed. Fording has scheduled Dec. 20 for a shareholder vote; however, rival but hostile suitors Sherritt International and the Ontario Teachers’ Pension Plan Board plan to have it postponed. Those two entities have offered $29 per Fording share. Teck Cominco fell 25 on the news to $10.91, while Sherritt slipped 8 to $4.16.

Most other producers fared as poorly or worse, except for LionOre Mining and First Quantum Minerals. LionOre rose 21 to $4.50 as it closed a $30-million equity financing, while First Quantum rose 55 to $3.61 as it fixed a proposed $18-million private placement of special warrants at $3.25 apiece.

The TSE’s Diversified Metals and Mining sub-group finished the period 5.38 points lower, at 122.35. Except for zinc, London had pulled the main base metals lower by the morning of Dec. 11.