Strong gold price pushes producers higher

The Toronto Stock Exchange’s composite index climbed a healthy 78.32 points over the June 11-17 report period to finish at 7,121.02.

Gold firmed up US$7.10 in overseas trading to plant itself at US$361.25 per oz. on the morning of June 18. Also trading higher were silver, at US$4.57 per oz., for a gain of US6, and platinum, at US$662 per oz., for a gain of US$7. Palladium slipped US$2 to US$173 per oz.

Wheaton River Minerals was again the most active issue, climbing 11 to $1.64 on a volume of roughly 22.8 million shares. Next came Placer Dome, which rose $1.62 to $16.85 as 10.8 million shares changed hands. Pushing the major along was an announced doubling of resources at the Cortez Hills deposit in Nevada. The deposit now hosts 4.5 million oz. in 38.5 million tonnes of measured and indicated material, and 1 million oz. in 17.3 million tonnes of inferred material. Cortez Hills is part of the similarly named, producing joint-venture operation in which Placer holds a 60% stake.

Eldorado Gold also climbed on heavy trading, rising 17 to $2.32 on a volume of 8.3 million shares. The unhedged producer recently hosted an analysts’ tour of its advanced Kisladag and Efemcukuru gold projects in Turkey. During the tour, the country’s prime minister told The Miner that a revised mining act, which provides further incentives to foreign investment, should be enacted by mid-July.

FNX Mining climbed 20 on news of having closed a $40-million private placement with a syndicate of brokerage firms. The underwriters will purchase 6.21 million treasury shares on a bought-deal basis, at $6.45 apiece, and may buy 1.56 million more, also at $6.45 each. Net proceeds are earmarked for the company’s 75%-owned properties in the Sudbury Igneous complex of northern Ontario. FNX finished the period at $6.70.

Similarly, First Quantum Minerals will raise $26.75 million by issuing 5 million shares to a syndicate of underwriters, at $5.35 apiece. The underwriters can buy 500,000 more shares within 48 hours of the deal’s closing, at similar prices. Net proceeds are earmarked for the company’s Kansanshi copper project in Zambia, thus replacing an earlier proposed financing with AIB Capital Markets.

The greatest percentage gainer was Canadian Zinc, which jumped 87% to 15 on no news. The company owns the advanced Prairie Creek zinc project in the Northwest Territories, where a 2001 scoping study calculated the break-even cash cost of production at US34.5 per lb. of salable zinc (net of byproduct credits but before financing and taxation). Zinc finished the period at US37 per lb., up two pennies on the week.

Nevsun Resources jumped 65, to $3.92, on news it had cut more rich tenors of copper and gold at its 90%-owned Bisha project in Eritrea. Results include 43.65 metres grading 5.78% copper in hole 17, and 63.35 metres grading 23.75 grams gold per tonne and 33 metres grading 4.41% copper in hole 20.