Strong gains among the interest-sensitive sectors helped move the Toronto Stock Exchange up over the period Aug. 22-28. The Bank of Canada took advantage of recent easing by the Federal Reserve Bank to make its own quarter-point cut in interest rates on Aug. 28, bringing the target rate down to 4%.
The rate cut had already been priced into the market in the three previous days, when the TSE 300 touched 7,662 points, but adverse economic news dragged it back to 7,578.35 — still good enough for a gain of 105.37 points (1.4% of value) over the five trading days.
The metals and minerals sub-group caught the wave and picked up 90.52 points to finish the trading period at 4,145.98, up 2.2%. The gain came despite a lacklustre stretch for the base metals, as nickel fell back US4 to US$2.54 per lb. and copper managed to claw its way up US1 to US68 per lb.
Newly formed mining giant Teck Cominco dropped 49 to $12 and was the most actively traded among the base metal stocks, with 4.4 million shares moving. The company is trying to determine how 65 workers at its Trail lead-zinc smelter in British Columbia were contaminated with thallium, a highly toxic metal linked to nerve damage. Regular maintenance work on the furnace area of the currently idled smelting facility has been suspended.
Boliden jumped 11 to close at 43. On Aug. 21, the Swedish-Canadian miner announced the completion of a US$243-million equity offering, part of a previously announced bailout package from Boliden shareholders, Swedish investors and the company’s creditors.
Nickel producer Falconbridge shed 2, finishing at $16.68. Falco recently announced that its 85%-owned nickel mining subsidiary in the Dominican Republic, Falcondo, will shut down its ferronickel operation for three months, owing to “continuing weakness in the nickel market and high oil prices.” The shutdown, during which the company will finish previously scheduled maintenance work, is expected to cut nickel deliveries by 8,000 tonnes.
The gold and precious minerals group lost ground, finishing at 4,793.25, down 139.15 points. Barrick Gold, with 5.5 million shares riding the tape, was the volume champion, though it fell 93 to close at $24.85. With gold falling US$4.40 over the same period, non-hedgers were hit: Agnico-Eagle Mines slid 27 to close at $14.43 and Kinross Gold backed up 8 to close at $1.35. TVX Gold, which returned to the TSE 300 gold group, gained 9 to 77.
Off the gold index, Geomaque Explorations slid 15 to close at 9 with 4.9 million shares traded. Geomaque had reported a US$1.2-million loss for the second quarter.
Another junior gold producer, Claude Resources, dropped 8 to 56. The company recently posted a loss of $1.2 million for the first half of 2001, thanks in large part to lower grades at the Seabee gold mine in Saskatchewan.
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