MINING MARKETS & INVESTMENT NEWS — EASTERN MARKETS — Precious, base metal stocks continue rebound

Looking for a little safety in today’s turbulent markets, investors continued to flock to mining, oil and forestry stocks during the Sept. 16-22 report period. The TSE’s gold and precious metals sub-index shot up 4.3%, to 5,829.31, while the metals and minerals sub-index climbed 2.3%, to 2,937.19.

Commodity-related issues were the top performers in the TSE 300 composite index, which slipped only 0.06%, to 5,538.10.

Gold popped its head up above US$293 per oz. on Sept. 21. For the week, however, prices dropped US$1.15, to US$288.00 per oz., at the London morning fix of Sept. 23. Silver dropped 7 cents to US$4.88 per oz., while platinum sank $12 to US$353 per oz.

Canada’s gold majors benefited from the renewed strength in the mining sector: Barrick Gold was up $1.05 to $27.45; Placer Dome rose $1.05 to $18.80; Kinross Gold climbed 18 cents to $3.95; and TVX Gold eased up 10 cents to $3.15. Only Cambior bucked the trend, dropping 30 cents to $8.25.

Among the royalty companies, Franco-Nevada Mining was up $1.55 to $27.80, while Euro-Nevada Mining jumped $2.65 to reach $21.65.

While base metal prices were generally stable for the week, the base metal majors all saw gains: Inco rose 90 cents to $16.45; Falconbridge was up 15 cents to $15.25; Noranda gained 15 cents to hit $21.50; Teck’s B-series shares were up 50 cents to $13.70; and Rio Algom climbed 95 cents to $19.

The noose grew tighter around the neck of Royal Oak Mines as the company announced it would take an $81-million writedown during the third quarter.

The move is the result of an asset revaluation using a gold price of US$300, rather than US$350, per oz. The writedown lowers the value of Royal Oak’s Timmins and Yellowknife operations but does not affect the carrying value of the new Kemess South mine or its Kemess property position. Royal Oak is currently selling all gold production into the spot market. At presstime on Sept. 23, the company was trading at $1.10, up 5 cents.

Among the juniors, Pangea Goldfields rose 35.5 cents to $1.38 on the discovery of two new gold-bearing structures on its jointly owned Tulawaka property in northern Tanzania. Partner Explorations Minires Du Nord remained unchanged at 90.5 cents.

Etruscan Resources advanced its Samira gold project in Niger to the feasibility stage. The project, as envisioned, could produce at least 70,000 oz. gold annually over eight years at a cash cost of US$150 per oz. The markets, however, did not take kindly to the news. Etruscan dropped 28 cents to $1.62.

Perhaps signalling the end of a long period of erosion from a peak of $2.50, shares of South American Gold & Copper saw heavy trading over two days, with a 3 cents rise to 7 cents. In early September, the Toronto-based junior signed a letter-of-intent with a Chilean company to develop jointly the Choquelimpie gold-silver-copper project, east of the northern Chilean port city of Arica.