Miners recover in quiet market

The summer holidays got their official launch with the Canadian and U.S. holidays during the report period June 28-July 4, and the equity markets put their feet up as well. The Toronto Stock Exchange’s composite index fell 56.30 points, or 0.6%, to 9,941.79 in four trading days.

The mining sectors recovered from the previous week’s losses, with the mining and metals index up 1.42 points at 290.66 and the gold index rising 0.9 point to 197.40. The rise in the golds was curious considering the US$10 fall in the price of gold bullion between June 30 and July 4. While there was some strength in both dollar/euro and dollar/yen exchange rates, the significant factor in the fall appeared to be sales by funds.

Most active of the golds was Bema Gold, with 13 million shares traded. It was up 15 at $2.92. The biggest price move on the index was Placer Dome‘s 58 fall to $18.20.

Off the index, Mundoro Mining was up 52 at $2.92. The price went into a slump shortly after the company announced results of a prefeasibility study on the Maoling gold deposit in Liaoning province in northeastern China. The project, based on its indicated 120-million-tonne resource at 1 gram gold per tonne, has an 18% internal rate of return and should produce an average of 364,000 oz. gold annually over eight years.

Alamos Gold was a big gainer, adding six bits to finish at $4.85. There was no news from the company but significant volume traded late in the report period; about 2.1 million shares changed hands over four trading days.

Another quiet one, Kirkland Lake Gold, vaulted 38 to $4.08 on a volume of 1.2 million shares. The company continues to drill on extensions to ore zones at the Macassa mine in Kirkland Lake, Ont.; combined with a jump in the price of Queenston Mining in the previous trading period, the price move suggests some market speculation about that target.

Results from the Tucumachay gold-silver project in Peru pushed Gitennes Exploration up 29 to $1.04, though only on moderate volume. Surface chip and panel sampling on known veins at Tucumachay’s Esperanza prospect returned gold grades in the 1-to-7-gram-per-tonne range, along with silver grades of 3-45 grams, across significant widths. Gitennes is earning a 100% interest in the property from Inmet Mining; Inmet will retain a royalty.

With copper down US$181 per tonne during the trading period, to US$3,444 per tonne, and nickel down US$120 at US$14,400, there was no cause for rejoicing on the base metal side, but the bargain-hunters came to the rescue. The big movers in the sector were Teck Cominco, whose B shares rose $1.39 to $41.71, and Cameco, which was up $1.37 to $55.45.

The swan song of Noranda went into the minor mode, with common shares off 86 at $20.79. Falconbridge was down 92 at $37.30. Shareholders approved the merger of the two companies, keeping Falconbridge’s name and Noranda’s shareholder list. The eight preferred-series shares of the new company will all trade as Falconbridge preferreds.

Off the index, Chariot Resources saw 4.1 million shares move, and was up 3, to 33. Drilling on its Marcona copper project in Peru is ongoing; three weeks ago, the company reported significant extensions to the property’s HG mineralized zone. Chariot warrants were up 3, to 13.

Another Peruvian explorer, Candente Resource, rose 28 (or 65% of value), to 71. There was no news, but Candente’s Peruvian subsidiary started a drill program in early June on the Canariaco property.