Panic hits broad market but sidesteps resource stocks

Stricken by panic leading up to and following the much-anticipated U.S. federal court ruling against Microsoft, the Toronto Stock Exchange 300 index nosedived 781.01 points between March 29 and April 4 to end the period at 9,141.84, or 7.9% lighter.

Untouched by the profit-taking, the gold and minerals sub-index climbed 4%, or 159.87 points, to 4,199.37, followed closely by the metals and minerals sub-group, which rose 2%, or 72.72 points, to 3,572.39. Both recouped the heavy losses suffered in the previous period.

Gold rose $4 to trade at a London morning fix of US$283.10 per oz. on the morning of April 5. Canada’s major producers were mixed: Barrick Gold rose $1 to $24.60, while Placer Dome pushed ahead 5 to $12.05. However, Kinross Gold slipped 18 to $2.10.

Franco-Nevada Mining jumped $1.70 to $16 on a volume of 3.2 million shares, ostensibly reflecting an influx of high-tech investors unnerved by the Microsoft case.

Geomaque Explorations climbed 2 to 28 on news that it had secured funding to complete construction at its developing Vueltas del Rio gold project in Honduras. Production is scheduled to begin in the fourth quarter at the annual rate of 60,000 oz., with life-of-mine cash costs pegged at US$169 per oz. Geomaque also announced improvements at the San Francisco mine in Mexico: 1 million tonnes, or 11% better than budget, grading 1.26 grams gold per tonne was placed on the leach pads during the first quarter.

SouthernEra Resources plunged 30 to $1.70, only to recoup 5 on April 5. The diamond miner devalued its exploration portfolio by $35.9 million to take a 1999 loss of $24 million. Although attributable production from the M1 kimberlite pipe was up 20% last year, it dropped considerably between the fourth quarters of 1998 and 1999. Over the past year, SouthernEra’s share price has fallen several dollars.

On the London Metal Exchange, nickel slipped 4 to US$4.54 per lb., while copper, lead and zinc each shed a penny. Falconbridge jumped $1.35 to $21.35, while Inco edged ahead 40 to $26.15. The latter recently announced it would provide a subsidiary of Lionore Mining International with a US$16-million loan to advance a nickel-sulphide deposit in Western Australia to production in exchange for the right to buy the concentrate produced. Lionore fell 5 to $2.10, only to slip another 10 on April 5, the day the deal was announced.

Montreal-listed Loubel Exploration set a new 52-week high of 31 before easing back 2 by the period’s end, reflecting a gain of 14. In February, Teck began drilling the company’s Lemoine property in northwestern Quebec, focusing on an area where gossans yielded up to 2.8% copper, 2.3% zinc and 48.2 grams gold in grab samples. Results are pending. Teck can earn a 60% interest in the property by spending $3 million over five years and purchasing shares of Loubel.