Madrid bombings shake US-led coalition

The report period ended March 16 was stained by a terrorist attack on Spanish commuters riding Madrid’s train system during the early hours of March 11. Ten bombs were detonated on four trains, killing 201 people and injuring around 1,500, apparently in retaliation for the Spanish government’s support for America’s war in Iraq.

Just as shocking, the bombings also changed the outcome of Spain’s general elections, which saw Spanish voters reject the government of Jose Maria Aznar, a key supporter of the Iraq war, in favour of the socialist and anti-war candidate Jose Luis Rodriguez Zapatero. Prior polling had predicted an easy victory for the ruling party.

Markets around the world sold off sharply in the days following the attack as suspicion mounted that the culprits were Islamic jihadists rather than the usual home-grown Basque separatists.

Canadian markets followed the global downtrend, with the S&P-TSX Composite Index tumbling 247.04, or 2.8%, to 8503.27. A contributing factor was the disturbing announcement by Nortel Networks, which sank 24% to $5.37, that it was placing Chief Financial Officer Douglas Beatty and Controller Michael Gollogly on paid leaves of absence as part of an accounting review.

The geopolitical turmoil strenghtened gold prices, which climbed back above the US$400-per-oz. mark. Gold stocks, however, were dragged down with the rest of the market, as evidenced by the S&P-TSX gold index, which fell 5.64 points, or 2.6%, to 212.49.

The most-active list was topped again by Wheaton River Minerals, which was unchanged at $3.92, even as it reported that fourth-quarter profits had soared to $27.8 million, or 6 per share, from $2.6 million, or 1 per share, a year earlier. Wheaton produces about 400,000 oz. gold and 7 million oz. silver annually and is primed to crack the million-ounce gold barrier in the coming years.

In second spot was TVI Pacific, which crashed 5 to 25 as it kicked off a 6,600-metre drill program at its new “Carlin-style” Shuikoushan gold project in China’s Hunan province. TVI will try to confirm and expand a resource calculated by Chinese geologists to be 12 million tonnes grading 3.8 grams gold per tonne, or 1.5 million contained ounces gold.

The S&P-TSX metals and mining index also retreated, sinking a hefty 8.83 points, or 4%, to 214.94. Inco and Teck Cominco led the way down, falling 45 to $45.05 and 90 to $23.15, respectively.

Among the base metal juniors, London-based America Mineral Fields at long last celebrated the granting of a presidential decree that will allow the company’s Kolwezi cobalt-copper tailings project in the Democratic Republic of Congo to go forward. Reserves there are pegged at a whopping 112.8 million tonnes of oxide tailings grading 0.32% cobalt and 1.49% copper. Shares ended the week up 25 to $2.25.