Miners show mixed results despite price rally

In a decidedly mixed week for resource stocks, the Toronto Stock Exchange gold and precious metals sub-group climbed 234.09 points during the Feb. 2-8 report period, while the metals and minerals sub-group slipped 332.71 points. Spurring the former was another rally in platinum and palladium prices, combined with a smaller yet significant surge in gold.

Platinum closed up $46 at US$541 per oz., whereas palladium soared $78 to US$574 per oz. Both are benefiting from uncertainty surrounding future exports of the metals from Russia.

Gold passed the US$300 barrier early in the period, only to dip below the benchmark on Feb. 7, when Barrick Gold announced it had halved (but would maintain) its hedge book. A clarifying report released the following day revitalized the yellow metal, resulting in an overall gain of $23 to US$306 per oz. Barrick, which says it does “not plan to increase [its] spot-deferred position based on today’s gold market,” closed up $1.50 at $25.

Also up were Placer Dome, which rose 85 to $25, and Kinross Gold, which edged ahead 28 to $2.58. Going the opposite way was Franco-Nevada Mining, which fell $1.30 to $19.45. In the previous week, Franco had announced that its Ken Snyder gold-silver mine in Nevada would produce less gold at a price higher than originally anticipated for fiscal 2000.

Geomaque Explorations lost 12 on heavy trading, ending the period at 24. The junior has suspended construction at the Vueltas del Rio gold project in Honduras in order to focus on the troubled San Francisco gold mine in Mexico, which incurred a loss in the final quarter of 1999.

Once again, base metal markets were fixed on nickel, which rose another 18 to US$4.20 per lb. Nevertheless, Inco plummeted $3.30 to $25.70 and Falconbridge fell 90 to $24.90. Ironically, both companies announced better earnings in 1999, though Falco conceded that several operations failed to meet cost targets.

Aur Resources threatened to withdraw its takeover bid for Cambior unless it receives all the company’s financial information. In response, Cambior says it would do so only if the takeover bid were to be extended. Both companies were hurt by the exchange, with Aur falling 5 to $2.20 and Cambior dropping 2 to $2.07.

Freewest Resources was the highest percentage gainer, climbing more than 156% to 65. The company raised $500,000 in a private placement to renew exploration at properties held in New Brunswick and Ontario. One of those has returned up to 76.8 grams gold per tonne in grab samples, whereas another has yielded up to 3.82% nickel, 1% copper and 2.43 grams platinum group elements.