Placer announces layoffs amidst gold-market slump

The slump in the gold industry finally extended its reach to Placer Dome’s Campbell mine in northwestern Ontario during the week ended April 28 when 99 employees learned that they were losing their jobs. Traditionally insulated from gold’s changing fortunes by the high-grade nature of the Campbell orebody, the town of Red Lake was in shock after the announcement.

“Everyone knew it was coming, but we didn’t think the cuts would be this extensive,” said Rick Smit, a reporter at the Red Lake District News. Part of what the company described as an effort “to optimize the mine life,” the corporate cost-cutting drive affects another 115 workers at the Sigma and Equity Silver mines. They came as gold stocks were giving up all of the gains made when Middle Eastern buyers moved into the market several days ago. Even American Barrick, which posted record first-quarter profits for the umpteenth time, took a drubbing as the yellow metal dropped by US$3.55 per oz. to close at US$335.70 today (April 29) in London. Barrick fell 25 cents to $26.88. Other casualties included Franco-Nevada, which gave up 63 cents, and Echo Bay, which fell 13 cents to $6.75.

Sentiment toward gold is such that Inco is rumored to be thinking of selling its stake in TVX Gold to boost its cash needs. Speculation surfaced as TVX suspended operations at its Casa Berardi Est mine in Quebec because of an inflow of overburden material. While TVX didn’t trade today, Inco was up 25 cents to $33.88.

Traditionally a haven in times of inflation, gold isn’t getting much help from low interest rates and some leading economic indicators that helped to push Toronto’s 300 composite index to its third straight gain. Today the index closed up 19.10 points at 3357.02 after 23.3 million shares worth $239 million had changed hands.

The other hot rumor is that Sherritt Gordon CEO Ian Delaney has moved to make Sherritt one of the world’s leading cobalt producers, by enquiring about the possibility of buying Queensland Nickel Holdings. According to Metals Week, Delaney wants the Australian company not so much for its Yabulu nickel refinery but for the Australian company’s cobalt potential. Hurdles to an agreement include the Australian government, a part owner, which may not want to give up control to a foreign company. Sherritt climbed 13 cents to $8.50. Among active stocks, Noranda was up 63 cents to $17.50. The resource giant recently reported a first quarter-profit of $17 million or 1 cents a share. Arimetco International was down 15 cents to $4.85.

Queenston Mining and Strike Minerals proved this week that even in trying times you can still cut a deal with a major. Falconbridge Ltd. has agreed to earn a 50% interest in their Robertson Twp. base metal property near Matachewan, Ont. Queenston was steady today, giving up 1 cents to close at 65 cents.