Metals melt as greenback catches fire

A strengthening greenback and higher interest rates south of the border sent gold down another US$7.55 to an afternoon close of US$425.16 per oz. in London on March 24 (London markets remained closed on Good Friday and Easter Monday). The Toronto Stock Exchange’s gold index responded predictably, ending the holiday-shortened March 22-28 report period off 10.3 points, or 5%, at 191.19 points. Not to be outdone, the diversified miners shed 21.8 points, or 6.7%, to finish at 304.02, with the base metals lower across the board. Overall, the S&P TSX composite index plummeted 211.1 points to 9,482.4.

Southern Platinum was the most heavily traded miner, with 3.1 million shares making their way 18 lower to $2.54. London-based platinum producer Lonmin recently tabled a friendly offer of $2.66 for each share of the junior miner. The offer requires that two-thirds of Southern’s shares be tendered.

Next in line was Tahera Diamond, which saw fewer than half as many shares slip 3 to half a buck. The company plans to begin building its Jericho diamond mine in Nunavut this year and will step up exploration efforts on the Anuri and Muskox pipes, north and west of Jericho.

Fellow diamond explorer Ashton Mining of Canada returned some of its earlier gains to end 18 better at $1.55. Ashton and equal partner Soquem have recovered two diamonds weighing 5.66 carats and 1.17 carats from a 4.6-tonne sample of kimberlitic boulder on the southern end of the Lynx anomaly on the Foxtrot property in north-central Quebec. In all, the sample yielded a diamond content of about 2.56 carats per tonne.

SouthernEra Diamond jumped 6 to 50. The company has conditionally placed nearly 13.9 million units at 42 apiece. A unit consists of one share plus half a warrant, with a whole warrant exchangeable for one share at 64 per share for 24 months. The company has applied to have the shares listed for trading on the London Stock Exchange Alternative Investment Market. Proceeds will fund diamond exploration in Canada, Australia, Gabon, the Democratic Republic of Congo, and South Africa.

Political unrest in Kyrgyzstan sent shares in Centerra Gold $1.40 lower to $18.50. The company says operations at its Kumtor mine, 350 km east of the capital Bishkek, remain unaffected by the recent uprising. Earlier protests south of Bishkek blocked access to Kumtor for four days and forced Centerra to scale back mining briefly.

Also on the slide was Ivernia, which lost 46, or 20%, to finish at $1.81 after inking a deal to buy the 49% interest in the Magellan lead mine in Western Australia it does not already own, for around $100 million in cash and shares. Ivernia also picks up the vendor’s share of US$39.8 million worth of development loans.

Other losers were: uranium miner Southern Cross Resources, off a quarter, or 21%, at 93; UEX, down 42, or 15%, to $2.34; and Denison Mines, which fell $2.81, or 15%, to $15.99. Warrants for Denison shares, originally issued in late 2004, began trading on the TSX on March 28. Each warrant is exercisable for one share at $15 for five years