Resource stocks hit market

The Toronto Stock Exchange 300 index suffered mild losses during the Feb. 23-29 report period, shedding 65.87 points to end at 9,128.99.

The gold and precious metals sub-group nosedived 545.09 points to 4,222.76, while the metals and minerals sub-group plunged 420.55 points to 3,290.39 points.

Gold was fixed at US$293.75 per oz. on the morning of March 1, or $11.50 less than a week ago. Following suit, Barrick Gold slipped $2.80 to $23.65 and Placer Dome dropped $2.45 to $12.60. Placer announced healthy 1999 earnings despite having incurred US$95 million in merger and writedown expenses.

Iamgold rose 23 to $3.15, making it one of the few producers to do so over the period. In late February, the company announced that revenue, earnings and cash flow had all risen in 1999, thanks to higher output at its Sadiola gold mine in Mali. Iamgold earned US$2 million (or 3 per share) on revenues of US$14.7 million in 1999.

Cambior descended 19 to $1.77. A takeover bid by Aur Resources has been extended to March 21 and remains conditional on Cambior not selling any major assets. Aur lost 18 during the period, closing at $1.98.

SouthernEra Resources dropped 7 to $3, only to drop another 8 the following day. On March 1, SouthernEra announced it had acquired a 54% interest in the advanced Messina platinum-palladium project, 15 km southeast of its producing Marsfontein diamond mine in South Africa. The company is now attempting to acquire the remaining interest and raise development funds.

Nickel rose a penny to US$4.68 per lb., though it failed to take producers along with it: Inco fell $3.35 to $25.35, while Falconbridge slipped $2.55 to $20.70. Also down was Sherritt International, which slipped 25 at $3.55. Sherritt had announced earnings of $66.6 million (60 per share) for 1999 — a record for the company, and up from a loss of $46 million in 1998. Its revenues grew to $193 million from $178 million in the previous year.

Boliden dipped 5 to $3.26 on news it had incurred US$68.2 million in losses last year. However, the miner did post a healthy operating profit in the final quarter, suggesting brighter times may be ahead.

Breakwater Resources fell 9 to close at $2.75 despite having announced earnings of $22.5 million (29 per share) for 1999. The company also arranged a refinancing that cleared its current debt and allowed it US$21 million in revolving credit to go on the acquisition trail.

In junior markets, Minefinders rose 10 to $1 on news that it had cut bonanza gold grades in the first four holes of an ongoing infill drilling program at its Delores gold-silver project in Mexico’s Chihuahua state. Resources there are pegged at 35.2 million tonnes grading 1.4 grams gold and 84.46 grams silver per tonne, based on cutoff grade of 1 gram gold-equivalent.

Partners Semafo and Etruscan Resources are delineating two high-grade zones in the Libiri gold deposit — one of two that comprise their developing Samira Hill project in Niger. The former closed up 18 at $1, whereas the latter dropped 5 to 65.

Viceroy Resource added 1 to close at 71. The company inked a joint-venture deal with the Australian unit of Finnish metal producer Outokumpu to earn a 100% interest in all precious metal production from Outokumpu’s properties surrounding Viceroy’s Bounty mine in Western Australia. Viceroy is to spend $4.5 million over five years to earn the interest.

Pioneer Metals announced it was drilling at the Nokomis Lake gold project, optioned from Placer Dome, near Pioneer’s ill-fated Puffy Lake gold property. Pioneer will be drilling two short holes and three deep ones on Nokomis, which has a deposit with an indicated resource of 80,000 tonnes grading 10 grams per tonne in one zone and 240,000 tonnes grading 6 grams in a second zone. Pioneer was up 1 at 19.

On the Montreal board, Noveder slipped 5 to 13. Results are still pending from a drill program carried out at the Rainbow property in Newfoundland. Rainbow is one of five Noveder properties that collectively cover more than 7 km of the sedimentary horizon hosting the Nugget Pond deposit, being mined by Richmont Mines.