MINING MARKETS & INVESTMENT NEWS — EASTERN MARKETS — Producers keep TSE buoyant, Barrick continues upward climb

Resource stocks enjoyed a robust period of trading during the report period Nov. 4-10, with both mining groups showing substantial gains. The Toronto Stock Exchange precious minerals and metals sub-index jumped 4.5% to 6,800.76 points, while the minerals and metals sub-group climbed 8.8% to 3,422.66 points. The rally helped keep broad market swings at bay, resulting in the TSE 300 index losing a modest 38.24 points, to end the period at 6,258.27.

Gold recouped some of its losses from the previous two quarters, gaining $3.50 to trade on the morning of Nov. 11 at US$293.60 per oz. Silver, however, fell 5 cents to US$4.99 per oz. — a far cry better than platinum, however, which plummeted $4 to US$338 per oz.

Continuing its upward momentum, Barrick Gold increased $1.40 to $33. Despite some minor dips, the major has risen by more than 50% in market value since August — a reflection of several factors, including improved earnings, lower operating costs and increased production at its various mines.

Other gold producers that made gains include: Placer Dome, which rose $1.25 to $24.50; Kinross Gold, which climbed 36 cents to $4.26; and TVX Gold, which increased by 41 cents to $3.05. Likewise, Euro-Nevada Mining rose $1.55 to $24.25, while royalty sister Franco-Nevada Mining gained $1 to the finish at $30.50.

Even Echo Bay Mines was up, 12 cents, to close at $3.57, despite reporting a substantial third-quarter loss in earnings. On the bright side, the recent quarterly loss was less than half of the loss suffered in the year-ago quarter, and an in-house re-engineering study indicates that mining could resume at the Lupin mine in the Northwest Territories.

Nickel posed for another strong week, gaining 4 cents to US$1.87 per lb. Though copper was nipped by a penny, zinc and lead were kept at par.

Among base metal producers, Rio Algom ascended $2.90 to US$22.50 and was closely followed by Inco, which rose $2.10 to US$18.30. Also up this week were: Falconbridge, up $1.65 to $18.30; Noranda, up 45 cents to $24.20; and Cambior, up 24 cents to $8.49.

A proposed merger between Montreal-listed Lyon Lake Mines and Vancouver-listed Palmer Resources translated into an 11 cents and 16 cents rise in their respective stocks. The announced amalgamation included a potential buyout by Lyon Lake of Placer Dome subsidiary Placer Dome de Costa Rica, which owns the Cerro Crucitas property in the country it’s named after. Though the property is touted to host a resource of 2.2 million oz. gold, the deal will only cost the junior the paltry sum of US$5 million in cash, 500,000 shares of the merged entity and a 1% net smelter return. Lyon Lake ended the period at 29 cents, while Palmer closed up higher, at 56 cents.

Junior Greystar Resources rose 23 cents to 78 cents on news of a doubling in resources at its Angostura gold-silver project in northeastern Colombia. Private engineering firm Mine Development Associates of Reno, Nevada pegged resources in the La Alta, Veta de Barro and Los Laches zones at 53.5 million tonnes averaging 2.37 grams gold and 7.96 grams silver per tonne. The calculation assumes a 0.7-gram cutoff grade and incorporates results from 137 diamond drill holes. Mine Development has yet to verify the data with a site visit and carried out the calculation as part of a prefeasibility study managed by KD Engineering of Tucson, Ariz.