Higher gold price adds Christmas cheer

The S&P-TSX composite slipped 60.9 points over the holiday-shortened Dec. 18-20 report period, partly because of a weakened gold group. The index finished at 6,560.62.

Gold ascended US$6.25 in overseas markets to land at a London morning fix of US$343.90 on Dec. 23. Despite the sustained rally — the yellow metal rose US$13.30 per oz. in the previous period — the gold group eased back two points to 191.42.

The most active honour went once again to Kinross Gold, which climbed 19 to $3.44 on a volume of 25.8 million shares.

Although it failed to gain as much as its smaller peers, Placer Dome eked out a 1 gain to end at $17.10. The same could not be said of Barrick Gold, which slipped $1.05 to $23.60 as investors digested the possible outcomes of an anti-trust lawsuit filed against it by New Orleans-based Blanchard & Co., the largest retail dealer in physical gold in the U.S.

Among junior miners, Eldorado Gold soared 13 to $1.83 as it raised $46 million for the advanced Kisladag gold project in Turkey. Kisladag hosts some 166 million tonnes averaging 1.13 grams gold per tonne. An environmental impact assessment has been submitted to the government, and a feasibility study will follow in March.

Also up was McWatters Mining, which outlined 1.2 million tonnes of new mineralized material at its dormant Kienna mine, near Val d’Or, Que. The resource, which averages 4.25 grams per tonne, is divided among two newly discovered zones. McWatters rose two pennies to 20.

The base metal group fared better than its precious metals counterpart, edging ahead 1.56 points to 128.60. Fording was the most lively and newsworthy, falling 24 on a volume of 3.3 million shares, as hostile suitors Sherritt International and the Ontario Teachers’ Pension Plan upped their takeover offer. Fording management quickly denounced the revision, noting that the trust units being offered could be worth $10 less than a unit of a proposed income trust to be formed by friendly suitors Teck Cominco and Westshore Terminal Income Fund. The Sherritt bid was extended until Jan. 23 in order to qualify as a competing bid under Fording’s shareholder rights plan. Sherritt rose 6 on the news to $4.24, whereas Teck’s B-series fell 23 to $11.30.

Cameco made one of the largest gains among the base metal stocks, rising $3.14 to $37.53, as it secured another 16.6% in Ontario’s Bruce nuclear power plant.

Breakwater Resources, up 1 to 13, announced it had been granted a 1-year extension on an outstanding debt of US$44 million. In return, the lenders will receive another 2 million warrants and have their existing ones re-priced to reflect prevailing closing prices. At the end of November, Breakwater still owed US$29.1 million under its term loans and US$15.2 million under its revolving credit facility.