STOCK MARKET — TSE robust despite poor showings by golds, base metals — Positive results boost value of SouthernEra; royalty sisters Euro and Franco hold steady

The Toronto Stock Exchange shifted into high gear over the report period ended Oct. 7, setting records on each of the five trading days. The TSE 300 index closed the week at 7,209.93 for a gain of 169.7 points, or 2.4%.

Trading was heavy throughout the week, with 130 million shares crossing the floor on Oct. 1. Declining metal prices left investors skittish, however, as both the gold and precious minerals and metals sub-groups suffered heavy losses. Gold prices fluctuated throughout the period. The spiralling prices rebounded somewhat on Oct. 6, only to fall again by the close of trading on Oct. 7.

On the morning of Oct. 8, gold was fixed on the London Metal Exchange at US$331.90 per oz. resulting in a loss of US$4.90. Platinum fell US$3, to US$432 per oz., whereas silver remained strong for the second week in a row, gaining 6 cents at US$5.25 per oz.

The Canadian dollar continued to gain on the greenback, rising 35 basis points, to US72.87 cents, on the Oct. 8 noon fix. The Loony lost ground against all other major currencies, however.

Gold’s woes left their mark on the TSE gold and precious minerals sub-group, with the index plummeting 365.03 points, or 4%, to close at 8,692.96. Major producers suffered, with Teck B-series leading the way — the issue lost $2.50 to close at $26. Barrick Gold saw its value deflate $1.45 to $32.80, whereas Placer Dome dropped $1.10 to $25.35.

Other issues in the sub-group were also hard-hit: TVX Gold and Kinross Gold each lost 45 cents, finishing at $8.15 and $7.20, respectively; Cambior dropped a buck to $14.55; and Greenstone Resources lost 65 cents, closing at $13.50.

Bucking the trend, however, were royalty sisters Franco-Nevada and Euro-Nevada. Each posted a gain of 45 cents. The former finished the week at $33; the latter at $24.70. Following in their footsteps was Cameco, which rose $3 to $54.85, and junior Teddy Bear Valley Mines, which climbed 18 cents to 45 cents.

Base metal prices on the LME were slashed across the board. Nickel dropped a dime, trading at US$2.98 per lb. on the morning of Oct. 8. Zinc fared a little better, losing 3 cents to close at US59 cents per lb. Copper and lead each fell 2 cents, to US93 cents and US27 cents per lb., respectively The TSE metals and minerals sub-group was off 159.98 points from the previous week, and closed at 4,673.12. Inco was down $1.70 to $32.85, while Falconbridge fell $1 to $24.70. Noranda lost $1.10, closing at $26.50, and Rio Algom lost $1.30 to finish the week at $28.80.

Performances in the metal markets may have been lacklustre, but diamond producer SouthernEra Resources had numerous boosters following the announcement of results from a bulk-sampling program on its Klipspringer diamond project in South Africa. A 144.6-dry-tonne bulk sample from the M-1 kimberlite, recovered with 95 percussion and reserve-circulation holes, returned an average grade of 335 carats per 100 tonnes. The sample yielded 484 carats with an average size of 0.32 carat. Three independent valuations on a 441-carat parcel had an average price of US$142.58 per carat. The issue gained $1.80 on the news, and closed at $20.20.

Also in the limelight was Potash Corporation of Saskatchewan, which climbed $4 to $112.50.

Not so lucky was junior Treminco Resources, which dropped 16 cents to finish at 44 cents. The company is exploring gold, silver and base metal properties in Canada, Mexico and the Dominican Republic.