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by Stockwatch Business Reporter

New York spot gold closed down $23.90 to $1,556.50 Monday, hitting a 4.5-month low as the U.S. dollar rose to a two-month high against the euro after more weak economic data from Europe. Greek socialists have yet to form a coalition government. Spanish and Italian bond yields are rising again and German voters have not approved Angela Merkel's latest austerity measures. In China, weaker-than-expected economic data forced monetary authorities to reduce the reserve requirement ratio for domestic banks. Here in Canada, the TSX Venture Exchange dropped 42 points to 1,303 and the TSX Gold Index lost nine points to 277.

Canada's larger gold miners followed bullion down. Eldorado Gold Corp. (ELD) lost 56 cents to $10.93 on 4.60 million shares, Barrick Gold Corp. (ABX) fell 44 cents to $36.65 on 3.91 million shares and Franco-Nevada Corp. (FNV) fell $1.36 to $40.39 on 954,000 shares.

Baja Mining Corp. (BAJ) added 1.5 cents to 36 cents on 2.11 million shares. President John Greenslade has resigned, finally giving in to Mount Kellett's latest request. Seven days ago the former president appointed Mount Kellett's four proposed directors to Baja's board. They are now looking for a new chief executive officer, and, more importantly, money. Baja has $41-million in cash, but will need $60-million this month and $75-million in June. If it cannot find the money it will have to suspend construction of its Boleo copper mine in Mexico. It had hoped to begin production at Boleo early next year, until last month, when Baja announced $243-million in cost overruns. Then, the company also said it had "received a number of offers from investment bankers to assist with financings." Last week, however, the story changed. Baja has merely "initiated preliminary discussions with members of the brokerage industry; however, equity markets remain difficult." Haywood Securities analyst Stefan Ioannou warns Baja might have to dilute its shares by another 225 million to cover its cash shortfall. The company already has 339.9 million shares outstanding. It also has over $220-million in long-term debt.

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