Golds fall again while nickel majors climb

Gold just can’t cut a break these days: spot prices fell steadily throughout the Nov. 14-20 report period to settle at a London morning fix of US$273.15 per oz. on Nov. 21. The yellow metal has lost nearly eight bucks in the past three weeks.

Canada’s major producers were down across the board: Barrick Gold sank $1.41 to $23.10 on a volume of just under 10 million shares; Placer Dome dropped $1.39 to $16.13 on 7.5 million shares; and Kinross Gold slipped 20 to $1.11 on 9 million shares.

Although unchanged, Franco-Nevada Mining took top spot in terms of both trading volume and value traded, with some 40 million shares, worth more than $933 million, changing hands. At the period’s start, the royalty king surprised the market by announcing a North American-Australian axis between it, Newmont Mining and Normandy Mining. The proposed merger would create, among other things, the world’s largest — and truly global — gold producer. Normandy rose $1.15 to $12.90 on a small volume.

Palladium miner North American Palladium sank to a new 52-week low on Nov. 19 but managed to recover somewhat the next day to finish the period at $6.75 for a loss of 44 on the week. However, by presstime, the company had fallen well below that to $5.81. On Nov. 20, NAP announced a $2.3-million loss for the third quarter, reflecting the devaluation in spot palladium and problems in starting up the new, larger mill at the Lac des les mine in Thunder Bay.

Despite a 26 drop in spot nickel, producers Inco and Falconbridge each rose in value, to $24.92 and $16.10, respectively. The rally may reflect the proposed merger between Australian miner WMC and American aluminum giant Alcoa, which now appears to be on the wayside. Too small to bank on such speculation, Sherritt International followed nickel’s decline by slipping 10 to $4.40.

Boliden, which jumped a nickel to 31, announced an end to its legal woes surrounding the tailings dam failure in 1998 at its Los Frailes base metal mine in Spain. The Regional Court of Sevilla has judged the accident to be a product of design and erroneous conclusions of the geological studies carried out prior to construction. Boliden, which has provided US$42.5 million for compensation and cleanup costs, as well as taking US$190 million in related writedowns, intends to seek third-party damages.

Breakwater Resources edged ahead a penny to 26 as it announced a 9-month loss of $102 million. Nearly 70% of the red ink flowed from non-cash writedowns, mostly on the Caribou and Nanisivik mines. Lower realized zinc prices also played a large part.

Among juniors, Orezone Resources rose 2 to 9 on news of having acquired the Seguenega gold project in Burkina Faso. Placer Dome highlighted the project’s oxide gold potential last year but subsequently backed away.