MINING MARKETS & INVESTMENT NEWS – EASTERN MARKETS

Majors languish as gold sags below US$290 per oz.

During the Dec. 16-21 report period, the TSE 300 composite eased up 2% to 6,381 points while the gold and precious minerals sub-index dropped slightly to 5,903.94 points.

Gold is showing once again that it is not necessarily a haven during times of political instability. Gold and most of the other precious metals slumped over the week, despite the dual political crises of the U.S.-British bombing of Iraq and a vote by the U.S. House of Representatives to impeach President Clinton. On the London Metal Exchange’s morning fix of Dec. 22, gold dropped $3.85 to US$288.70 per oz., silver dropped 33 cents to US$4.80 per oz., and platinum slumped $7 to US$347 per oz. The notable exception was palladium, which soared US$13 over the week to US$310 per oz.

Most of North America’s major gold miners showed declines through the week: Newmont Mining dropped $1.12 to US$17.12; Barrick was down 30 cents to $29.40; Kinross Gold slid 20 cents to hit $3.58; Battle Mountain Gold dropped 38 cents to US$4.06; and TVX Gold slipped 11 cents to $2.75.

Trading in Getchell Gold and Placer Dome remained heavy in the wake of last week’s proposed US$1.1-billion acquisition of Getchell by Placer. Perhaps as an indication that Placer paid too much, the major’s shares continued to fall, dropping another $1.05 to $17.85. Nasdaq-listed Getchell slipped 50 cents to US$27.62, still below the US$34.45-per-share offer made by Placer.

Bucking the gloomy trend were Franco-Nevada Mining, which gained 35 cents to reach $30.15, and Euro-Nevada Mining, which rose $1.05 to $24.85.

The outlook was mostly brighter among the base metal miners, despite continued weakness in metal prices: Noranda rose 25 cents to $19.40; Teck’s B shares climbed 85 cents to $10.60; Rio Algom was up 60 cents to $17.35; Inco gained 60 cents to $16.25; and Falconbridge dropped 20 cents to $16.05.

Skies over the New York Stock Exchange darkened: Phelps Dodge lost $1.94 to close at US$50.25; Cyprus Amax slipped 6 cents to US$9.69; Freeport-McMoRan Copper & Gold dropped 75 cents to US$9.94; and Asarco lost 56 cents to hit US$15.75.

Among the juniors, North American Palladium shot up 42 cents to $1.50 on the back of rising palladium prices, which were spurred by an announcement by Russian miner Noril’sk that delays in issuing 1999 export quotas might prevent exports of platinum group metals in the first quarter.

The most heavily traded junior on the eastern markets was Vancouver-based KAP Resources, which rose 4 cents to 6 cents following the previous week’s 17 cents crash. On Dec. 22, the TSE suspended trading in KAP for its failure to meet listing requirements. The company’s sole assets are the Yolanda nitrate concessions in Chile’s Atacama Desert. The company’s $9-million cash position is dwarfed by a debt of $86-million.

Denison Mines dropped a penny to 10 cents on heavy volume as the Atomic Energy Control Board announced a deferral of final approval for the construction of a uranium tailings facility at McClean Lake, Sask.

Meanwhile, in Greece, Denison halted its Prinos oil operations and laid off all but a skeleton staff.

With the release of further drill results from its promising Red Lake gold project, Goldcorp climbed 90 cents to $8.70. The stock has more than doubled since early September.

Still trying to recover from September’s share-price nadir of less than $4, Sutton Resources rose $1.05 to $6.25 as the company announced the discovery of additional gold mineralization at its multi-million-ounce Bulyanhulu project in Tanzania.