Golds shine in spring earnings season

TORONTO STOCK EXCHANGE

Gold outshined the other precious metals during the April 21-27 report period, gaining US$3.50 per oz. to end at US$396.25 per oz. in the afternoon in London; platinum and palladium both suffered losses of around 5%. The Toronto Stock Exchange’s gold index failed to reap the benefits, ending 1.5% lower at 196.62 points. Overall, the S&P-TSX Composite Index finished the week 38.03 points lower at 8,535.02 points.

The golds were a busy bunch during the period. Barrick Gold saw its first-quarter earnings slide about 10% (compared with year-earlier profits) to US$26 million as the company delivered some of its gold production into hedge contracts at prices below spot. The company’s shares fell 77 to $27.28. Likewise, Placer Dome saw its first-quarter earnings trimmed by about 5% to US$60 million as production costs rose 8% and property, plant and equipment spending jumped 77% to US$69 million. Placer managed to add 13 to reach $20.12. Kinross Gold rounded out the country’s major gold producers, with a 6 gain to $8.16. The company’s earnings are due out on May 10.

It was a grimmer picture for Goldcorp, which fell $1.12, or nearly 7%, to $15.70 despite a 22% rise in first-quarter earnings to US$17.3 million. The improvement was tempered by the accompanying news that Chief Operating Officer Bruce Humphrey and Corporate Development Executive Chris Bradbrook had resigned.

Iamgold and Wheaton River Minerals added a nickel and 7, respectively, after signing a definitive merger agreement. The deal still needs the OK of at least two-thirds of Wheaton’s shareholders and a majority of Iamgold shareholders. Shareholder meetings are slated for early June. Iamgold finished at $7.11, Wheaton at $3.71.

Glamis Gold surrendered early gains, falling 33 to $20.30. The company recently said the Department of the Interior Board of Land Appeals had rejected an appeal filed by Western Exploration for a stay on the expansion of the Marigold mine in Nevada.

The diversified metals and mining index fell one point to 206.88. Earnings at Teck Cominco soared nineteen-fold to $96 million on higher copper and zinc prices. Year-earlier earnings were eroded by $6 million’ worth of after-tax deductions relating to retirement obligations and stock-based compensation expenses. Noranda rode higher metal prices into the black with a profit of US$153 million in the first three months of 2004 despite lower production. Teck and Noranda say they will try to revive the former’s mothballed, 180,000-tonne-per-year Lennard Shelf zinc mine in Western Australia. Noranda can earn a half-stake in Lennard Shelf by spending A$26 million.

Inco and Cameco also posted higher first-quarter earnings; the shares went in opposite directions, with Inco shedding $1.44 to $42.56, and Cameco advancing $2.61 to make $62.81.

On the flip side, Fording Canadian Coal Trust saw its first-quarter profits plummet nearly fourteen-fold to $10.7 million, owing to a 3-week strike by railway workers that choked coal shipments. The company also noted that year-earlier earnings included one-time gains associated with the restructuring of Fording into an income trust. Units in the trust climbed $3.16 higher to $57.90.