Nickel slips as Inco averts workers’ strike

Unable to catch a break these days, gold ended the May 24-30 report period at its lowest level in eight months. However, the yellow metal regained some strength overnight, being fixed at US$272.25 per oz. on the morning of May 31. This represents a loss of $1.65 for the period.

Canada’s major producers of the yellow metal were mixed: Barrick Gold climbed 75 to $27.95, whereas Placer Dome fell 45 to $12.70. Kinross Gold, which is largely unhedged, and thus more sensitive to the spot price, set a new 52-week low of $1.42, for a loss of 24.

Campbell Resources‘ 1-for-10 share consolidation ended that issue’s year-long languish in the pennies, but the shares closed at $2.26, effectively a 16% loss over the trading period.

Geomaque Exploration edged ahead 4 to 22 on news of having trimmed costs at its San Francisco mine in Mexico. Mining is scheduled to end there by the summer’s end but will be replaced by the startup, in the fourth quarter, of the separate Vueltas del Rio project, in Honduras. The last of the reserves to be placed on the San Francisco leach pad will enable leaching to continue for a year.

Iamgold, which already produces gold in Mali, at the jointly owned Sadiola Hill mine, began testing an historic mining camp in southern Ecuador. A 6,000-metre drill program is focusing on possible extensions to multi-veined mineralized systems from which 3.5 million oz. gold and 17 million oz. silver were mined up until the 1950s. Iamgold closed down 10 at $2.70.

In base metal markets, the nickel price slid 56 to US$4.19 per lb. as fears eased over contract negotiations at the Ontario Division of Inco. Inco shares were off $1.15 at $24.55, while cross-town rival Falconbridge fell $2.25 to $22 in the same period. Nickel producer Sherritt was the volume leader among base metals, tacking on 8 to close May 30 at $4.70 as 5.6 million shares rode the tape.

The other base metals were much quieter, but also generally weaker; zinc fell 2 to finish the report period at US51, and copper was off 3 at US79.

Trading was relatively light in all the base metal stocks, with 2.5 million shares of Inco and 2.4 million of Noranda changing hands. Noranda was off 85 at $14.85, Rio Algom fell 55 to close at $18.25, and Cominco was down $2.20 at $21.20.

The smaller base metal producers all lost ground, with Aur Resources off 8 at $2.67, Boliden down 20 at $2, Inmet Mining slipping 4 to 2.52, and Breakwater Resources plummetting 73 to close at $2.90.

Among juniors, Gammon Lake Resources climbed 25 to $5.50, only to slip 70 on May 31. The market appears to have reacted poorly to the junior’s latest drill results, released on May 31, from its Ocampo gold-silver project in Mexico’s Chihuahua state.