MINING MARKETS & INVESTMENT NEWS — EASTERN MARKETS — Gold drops, nickel leadsrally in base metals

The Oct. 13-19 report period saw a third week of declines in the gold price, with the yellow metal diving US$10.75 to US$309.75 per oz. on the London morning fix of Oct. 20.

Though gold’s weakness took its toll on the share prices of Canada’s gold majors, the sector was full of news.

Barrick Gold was off 75 cents to $29.35 as the company released stellar third-quarter results indicating US$79 million in profits. The major also unveiled a revised mine plan for its Bulyanhulu project in Tanzania. Coming on-stream in early 2001, the new mine will crank out 400,000 oz. annually at an operating cost of US$130 per oz. over a minimum 15-year life.

Placer Dome announced it had produced 2.3 million oz. over the first nine months of 1999 at a cash-production cost of US$165 per oz. and a total cost of US$237 per oz. Placer shares closed down $1.65 to $19.75.

Dropping $3.05 to $27.75, Franco-Nevada Mining has decided to spend $2 million expanding the capacity of its Ken Snyder mine in Nevada, from a daily 650 tons to 1,000 tons.

Cambior dropped 39 cents to $2.42 amid continued confusion as to how the company would crawl out of the hole it had dug itself; its naked 1999 call options now have a negative paper value.

Kinross Gold slipped 21 cents to $3.86 as the company posted a third-quarter net loss of US$11.4 million on revenues US$79.7 million.

TVX Gold, off 36 cents to $1.63, has revised its feasibility study for its Olympias polymetallic project in Greece.

Among the smaller producers, Agnico-Eagle Mines announced that deep drilling at its Laronde mine in Quebec has extended Zone 20 by some 2,700 ft. below the previously deepest intersection. The intersection returned 52 ft. grading 0.19 oz. gold per ton, 0.18 oz. silver and 0.18% copper. Over the week, Agnico shares declined 45 cents to $12.90.

Wheaton River Minerals jumped 8 cents to 46 cents on news of achieving record production and earnings in the 9-month period ended Sept. 30. Both accomplishments bode well for the company as it continues discussions with parties interested in financing its Bellavista project in Costa Rica, where mining could begin as early as next year.

Going the opposite way was Geomaque Explorations, which fell 12 cents to 70 cents. The decline comes on the heels of the company’s raising $4.6 million and its disclosure that it has sold forward 10,000 oz. at US$290 per oz.

Down 17 cents to $3.68, Pangea Goldfields released partial drill results showing high-grade, deep gold intercepts at the Golden Ridge project in Tanzania, a joint-venture with Barrick Gold. The latter, which is serving as operator, intends to expand the program to 20,000 metres by year-end. Drilling is also under way at three more of Pangea’s projects in Tanzania.

In the base metals markets, spot nickel prices soared 29 cents over the week to US$3.50 per lb. Added upward pressure has been placed on the metal by locked-out workers at Inco’s Thompson division, who recently rejected the company’s latest contract offer.

The rise in nickel was good news for the shares of Canada’s two big producers: Inco gained $1.70 to hit $30.95 as the company announced the discovery of a high-grade zone of nickel, copper and platinum-group mineralization at its dormant Totten mine in Sudbury; and rival Falconbridge rose $2 to $22.25 as it celebrated improved third-quarter earnings of $36.6 million, despite losses from the Kidd Creek strike and restructuring charges in Sudbury.

With copper and zinc up 1 cents and 2 cents to US78 cents per lb. and US53 cents per lb., respectively, Canada’s remaining base metal majors combined for a mixed week: Noranda was up 70 cents to $19.30; Rio Algom declined 80 cents to $18.95; Teck’s B shares fell 20 cents to close at $14.20; Cominco gained 50 cents to $25.50; and Boliden slipped 5 cents to $4.