STOCK MARKETS — Markets turn upward but golds are thumped

The Toronto Stock Exchange recovered from the previous week’s slight decline, posting a gain of 43.30 points or 1%, closing Tuesday, Oct. 17, at 4,515.60.

The TSE posted most of that gain on Friday in lockstep with the New York board, which was buoyed by news that the annual inflation rate had fallen to 0.1% in the U.S. The TSE’s transportation, industrial products and resource-based sub-indexes all rose sharply as investors sought export-sensitive stocks that would benefit from a healthy U.S. economy.

The Canadian dollar continued to back away from its early October heights as currency traders watched developments in the Quebec referendum campaign. Polls suggest the separatist side is rebounding. The Loony closed Tuesday at US74.74 cents, off 15 basis points from a week before, and was substantially weaker against the Japanese yen and the European currencies. The Bank of Canada pushed the bank rate up slightly, to 6.67% from 6.63%. The increase was not sufficient, however, to move commercial interest rates.

The London gold fix was US$383.75 per oz. on the morning of Oct. 18, down 95 cents on the week, and other precious metals were also lower. Silver, at US$5.35 per oz., was off 7 cents, and platinum fell $1.90 to a Wednesday morning fix of US$413.35. Lower precious metals prices brought gold stocks through the 10,000-point level, with the TSE gold and precious metals sub-index closing Oct. 17 at 9,891.44, down 435.29 points, or 4.2%, from the previous report period.

The gold group’s big guns both lost ground. Placer Dome took a $2.50 loss to close at $31.25, and Barrick Gold was down $1.75 to $33. Smaller gold producers generally took smaller losses, including Agnico-Eagle, which fell 62 cents to $17.38, and Echo Bay Mines, which also lost 62 cents to close at $13.38. Hemlo Gold Mines was unchanged at $12.88, and Cambior gained 25 cents to close at $14.

Franco-Nevada Mining continued its slide, closing at $76.75, a loss of $2.50. Affiliate Euro-Nevada Mining lost 62 cents to close at $46.63.

The metals and minerals sub-index responded to relative strength in base metal prices and to the rosy economic picture in the U.S. The sub-index took on 84.05 points to close Tuesday at 4,683.20, a gain of 1.8%. Only copper posted a loss on the week, sliding 2 cents to US$1.23. Nickel was up 3 cents to US$3.52, and zinc rose 1 cents to US44 cents. And lead, which had moved little in past weeks, shot up 2 cents to US29 cents.

The large, integrated mines all gained substantially, with Inco adding $2.13 to close at $45.63 and Noranda picking up 88 cents to close at $26.63. Nickel stocks were strong, with Falconbridge up 75 cents to $28.75 and Sherritt up $1.25 to $18.50. Inmet added 50 cents to close Oct. 17 at $10.13. And both Teck B-series, at $26.25, and Cominco, at $26.38, were up 25 cents.

High-flyer Bresea Resources continued to soar this week as its 24%-owned affiliate, Bre-X Minerals, announced an updated resource calculation from the Central zone of the Busang gold project in Indonesia. Bre-X announced that the zone’s measured, indicated and inferred resources totalled 35.1 million tonnes averaging 2.44 grams gold at a cutoff grade of 0.5 gram. Bresea shares surged ahead by $9.75 to $28.50.

News of a gold discovery in French Guiana helped Franc-Or Resources tack on 10 cents to close at 40 cents. The company outlined a geochemical anomaly from which assays from 20 rocks samples averaged 30.3 grams gold per tonne. Franc-Or will complete additional trenching and sampling to define the zone further.

Elsewhere in South America, Chesbar Resources released results from four drill holes at the Central gold zone of La Salle I concession in Venezuela. One of the better sections assayed 7.9 grams gold over 26 metres. In response, Chesbar shares jumped 41 cents to close at 89 cents.

A proposed restructuring in which preferred shareholders of Denison Mines would receive 25 new common shares and one old common share for each preferred share held was well-received. The series A preferred shares added 25 cents to end at $3, while the series B preferreds rose by 35 cents to close at $3.