STOCK MARKETS — Gold majors post gains as bullion rises — Base metal producers also enjoy a better week

Led by the surprising performance of the golds, the Toronto Stock Exchange 300 composite index ended the report period of Jan. 14-20 at 6509.45, a recovery of 179.86, or 2.8%, over its level of Jan. 13.

The Canadian dollar fell 22 basis points over the report period against the U.S. dollar, closing at US69.49cents on Jan. 20. On that day the Loony traded as low as US69.37cents — its lowest level in almost 12 years — as the Bank of Canada bought up the currency but showed no signs of defending the dollar by raising interest rates. The dollar also lost ground against the pound and the yen, but gained on the Deutschmark.

On Jan. 21, gold zoomed up US$6 from the previous week, for a London morning fix of US$291.90 per oz. Over the report period, silver dropped a dime to US$5.80 per oz. while platinum edged down 50cents to US$378 per oz. The TSE’s gold and precious metals index rose to 6125.29 points, up a healthy 322.71 points, or 5.6%, from last week.

It was a newsworthy week for many of Canada’s major gold producers, who recorded significant gains: Barrick Gold rose $1.10 to close at $25.30 as Peter Munk’s real estate giant TrizecHahn finally announced the sale of its 28.2 million Barrick shares, representing a 7.8% interest; Placer Dome gained $1.20 to $17.90 as it announced that construction was being suspended at Las Cristinas until the Venezuelan Supreme Court ratified the major’s legal hold on the project; Cambior rose 20cents to $14.35, with the company announcing it was acquiring the remaining half interest in the Doyon gold mine in Rouyn-Noranda from Barrick.

Among the other producers, Kinross Gold rose 30cents to $4.60, Teck gained 50cents to close at $20.50, Franco-Nevada Mining jumped $2.55 to $29.75, as did Euro-Nevada Mining, leaping $1.75 to $18.15. Only TVX Gold bucked the trend, dropping a nickel to $3.75.

The spot prices for base metals saw little movement through the report period: Copper gained a penny to US77cents per lb.; lead remained unchanged at US24cents per lb.; zinc rose 1cents to US51cents per lb.; and nickel dropped 2cents to US$2.44.

The TSE mining and minerals sub-group slid 90.56 points, or 2.3%, to close at 3,698.02.

Westmin dropped 10cents to $5.30, a dime below suitor Boliden’s bid price.

Meanwhile, Boliden posted an impressive 80cents gain, rising to $2.80 as the bid deadline approached, with Boliden having acquired a 6.7% stake in Westmin by the end of the report period.

Despite static markets, the major base metal producers recorded badly needed gains after their recent beatings. The markets were perhaps coming to the realization that at least North America’s demand for base metals would continue to be relatively strong over the near-term despite Asia’s economic troubles.

There was nowhere to go but up over the report period: Inco rose $1.45 to $23.35; Falconbridge gained 90cents to close at $17.20.; Noranda was up $1.90 to $24.20; Rio Algom rose $2.10 to $23.85; Cominco gained $1.15 to close at $21.90; Inmet rose 20cents to $4.75; and Cameco rose $1.75 to $42.00.

Pure Gold Minerals was the most heavily traded junior, with 3.1 million shares passing hands. The furor arose from reports that more diamonds were recovered from the Buffalo Hills project in Alberta, which the company shares with Ashton Mining of Canada and Alberta Energy. Despite the favorable news, expectations were even higher and Pure Gold fell 5cents to land at $1.18.

Ashton fared worse, dropping 95cents to $5. Alberta Energy gained 10cents to close at $27.80.