TSE slides as precious metals fly

Except for the last day, buyers outpaced sellers over the Nov. 5-11 report period, but not enough to overcome last minute profit-taking. The Toronto Stock Exchange composite index finished the period at 7,815.46, down 28.01 points.

Precious metal bugs swarmed London, carrying both gold and silver higher. The yellow metal finished the Nov. 11 morning session at US$386.40 per oz. for a 5-day gain of US$8.10, while silver ended at US$5.06 per oz., up US13. Platinum also fared better, but not palladium.

Canada’s major producers were mixed: Barrick Gold climbed $1.21 to US$26.51; Placer Dome rose 72 to $20.67; and Kinross Gold fell 82 to $9.82. Kinross reported a third-quarter net profit of US$8.2 million; however, that came on a one-time gain of US$16.5 million arising from the early redemption of convertible debentures.

Glamis Gold, up 99 at $19.60, announced its intention to forge ahead with the Marlin project in Guatemala. A revised feasibility study concluded that an investment of US$120 million generates an internal rate of return of 25%. On a yearly basis, the developing open-pit mine produces 217,000 oz. gold and 3.3 million oz. silver.

Palladium issue North American Palladium rose $1.11 on news it had earned $3.5 million during the third quarter, or 20% more than a year earlier. The profit pushed 9-month earnings to $22.3 million, versus $16.7 million in the corresponding period of 2002. North American Palladium ended the period at $9.29, for a 6-month gain of 192%.

Ivanhoe Mines was the biggest newsmaker in the base metals sector, announcing that the high-grade core of the Hugo Dummet deposit had doubled in size. Hugo Dummet is the largest of four copper-gold deposits that make up the company’s Turquoise Hill project in Mongolia. Nevertheless, Ivanhoe sunk $3.06 to $11.15, partly reflecting a Forbes article in which the company and Chairman Robert Friedland are taken to task. Trading volumes were heavy.

First Quantum Minerals also made headlines, though it fell, slipping 14 to $10.50. Ongoing drilling at the Lufua zone in the Democratic Republic of Congo suggests that the recent discovery may be a Kansanshi lookalike. Kansanshi is also owned by First Quantum and sits in the Central Copper belt but on the Zambian side of the border.

Junior Sulliden Exploration was among the double-digit percentage gainers, rising 17.4% to $2.36. The company had reached $2.67 on Nov. 10, but fell back the next day after releasing an exploration update on its 70%-owned Shahuindo gold-silver project in northern Peru. Surprisingly, the report confirmed the presence of widespread but distinct soil anomalies.

Orezone Resources slipped 11 to $1.15 despite announcing the discovery of a new gold prospect at its Essakan project in Burkina Faso. Upwards of 2.44 grams per tonne in 6 metres of saprolite were intersected in the Soka anomaly.

TVI Pacific was the most active junior, slipping a penny on a volume of about 22.5 million shares. No report was forthcoming from the company, which last reported news in early October, when it sealed a bought-deal financing to improve its working capital and clean up its balance sheet.