MINING MARKETS & INVESTMENT NEWS — EASTERN MARKETS — Sagging gold prices fall below US$273 per oz.

Gold prices just kept dropping during the May 12-18 report period, plunging another $5.15 to reach a 20-year low of US$272.85 per oz. on the London morning fix of May 19.

For a second consecutive week, most of Canada’s major gold producers suffered declines: Barrick Gold fell $2 to $26; Placer Dome dropped 80 cents to $17.20; Kinross Gold was off 14 cents to $2.92; Cambior lost 10 cents to hit $5.60; and Agnico-Eagle Mines lost 20 cents to $8.05.

TVX Gold was one of the few bright spots, rising a modest 11 cents to $1.57 as the company announced first-quarter profits of $4.8 million on the back of rising metal production and lower production costs. TVX’s proposed partial merger with Australia’s Normandy Mining is set to close in late May.

Goldcorp climbed 35 cents to $8.10 as the company finally closed a $60-million bought deal with several Toronto brokerage houses. The deal came after months of corporate flip-flopping between different debt- and equity-financing options. The proceeds will be used to develop the company’s High Grade zone at its Red Lake gold mine in Balmertown, Ont. Goldcorp has already awarded two major contracts: Dynatec will carry out underground development and construction, and Hatch Associates will be responsible for designing and procuring the surface processing plant.

The story of the week in base metals was the closure of Canada’s largest base-metal producer, the Highland Valley Copper mine in British Columbia. The closure was long-anticipated, and the shares of Highland Valley’s owners eased off primarily in reaction to lower base-metal prices: Cominco shed $1.10 to fall to $2.25; Teck’s B shares slipped 5 cents to close at $12.15; and Rio Algom dropped 15 cents to $18.90.

The other base metal majors fared no better: Noranda lost 10 cents to fall to $19; Boliden was off 4 cents to $3.61.; Inco lost 35 cents to $24.95 as the major completed a bought deal for proceeds of US$273 million; and Falconbridge dropped 35 cents to $20.40;

Only Sherritt International bucked the trend, gaining 34 cents to reach $3.74 as the nickel-cobalt producer announced it had acquired 9% of Anaconda Nickel for about $51 million. Anaconda’s main asset is the Murrin Murrin lateritic nickel-cobalt mine in Australia.

During the week, junior gold explorer Golden Star Resources moved to acquire a 70% stake in the Bogoso gold mine on Ghana’s Ashanti trend. Bogoso is currently producing more than 100,000 oz. annually, with two years of mine life left based on current reserves. Golden Star finished up 7 cents to closed the period at $1.10.

On the Montreal board, Vauquelin Mines was 23 cents higher at 43 cents. Trading in Vauquelin shares was halted on May 17, and the company announced it was considering buying shares in a company operating “in a business other than natural resources.” The transaction has not been completed.