MINING MARKETS & INVESTMENT NEWS — EASTERN MARKETS — Rising prices keep nickel miners buoyant

Nickel continued to lead the revived base metal market during the Aug. 4-10 report period, with prices climbing 12 cents to US$2.91 per lb. thanks to a combination of growing demand, shrinking stocks and producer delays in Australia and elsewhere.

The rise helped all of Canada’s nickel miners post strong gains: Inco rose $2.20 to $28.95; Falconbridge climbed $1.40 to $23.50; and Sherritt International jumped 25 cents to reach $3.50.

The other base metals fared well, with copper up 2 cents to US75 cents per lb., zinc up 3 cents to US52 cents per lb. and lead up a penny to 23 cents per lb. Still, Canada’s majors had a mixed week: Noranda rose 35 cents to $20.60; Rio Algom lost 10 cents to $22.15; Teck’s B shares fell 50 cents to close at $11.45; Cominco surged $1.55 to $25.65; Boliden rose 20 cents to $3.45; and Aur Resources was up 5 cents to $2.70.

In gold news, the International Monetary Fund hinted it may back away from plans to sell up to 10% of its gold reserves, to ease the debt of developing nations. The IMF’s deputy managing director said the organization was searching for alternatives to gold sales but that it was not ruling out the sales.

After two weeks of gains, gold slipped back 60 cents to US$256.90 per oz. on the London morning fix of Aug. 11.

Canadian gold miners were also mixed: Barrick Gold was up 75 cents to $29.55; Placer Dome lost 25 cents to $15.65; Kinross Gold climbed 46 cents to $3.36; Cambior dropped 5 cents to hit $4.20; TVX Gold rose 5 cents to close at $1.22; Franco-Nevada Mining was up $1.10 to $22.50; and Euro-Nevada Mining gained 55 cents to $17.35.

Among the juniors, Scintilore Explorations dove 48 cents to 12 cents after an Ontario Supreme Court judge dismissed the company’s 12-year-old claim against prospectors, John Larche and Donald McKinnon, who had staked ground in the Hemlo gold camp of northern Ontario. In a damning judgment, Chief Justice Robert Sharpe wrote that he had “serious reservations as to the reliability of the evidence” given by plaintiffs Scintilore President Theodore Polisuk, geologist Robert Schaaf and adviser Walter Hryniw.

Laguna Gold staged a bit of a recovery over the week, rising 3 cents to 4 cents as the Denver-based company was forgiven US$6.5 million of principal and accrued interest due its largest creditor. Laguna’s shares collapsed from the 8 cents range after it failed to make an interest payment on June 30 and then halted operations at its new Rio Chiquito gold mine in Costa Rica.

Over on the Montreal board, South Malartic Exploration climbed 5 cents to 21 cents on news that it had acquired the Montauban gold-silver property near Trois-Rivieres, Que. The junior has budgeted $800,000 for a prefeasibility study, focusing on a known near-surface resource of 400,000 tonnes grading 6 grams gold-equivalent per tonne.