STOCK MARKETS — Toronto market waits it out

The Toronto Stock Exchange finished a sleepy week virtually unchanged, as traders waited on a possible interest rate cut. The TSE 300 composite index rose 0.1% or 8.9 points to close at 5,069.55 on June 25, mainly led by the financial and industrial sectors. Gold and base metal issues were broadly lower.

The Canadian dollar rebounded strongly on international currency markets over the same period, fuelling a widely held opinion that the Bank of Canada may announce a cut in its loan rate. The Loony was up 50 basis points to US73.55 cents, and was higher against the major European and Japanese currencies as well.

The gold price fell $2 on June 20 but rose steadily for the rest of the week, reaching a fixed price of US$385.10 on June 25, and settling back to US$384 per oz. on the morning of June 26. Platinum was off $3.25 to US4390.15 per oz. and silver lost 6 cents on the week to close June 26 at US$5.15 per oz.

TSE gold issues plunged on June 21 following gold’s fall, and closed the report period down 182.59 points or 1.6%, at 11,369.38. The most active stock on the index was Bema Gold, which lost 40 cents to close at $5.75. The company is already producing gold from the joint-ventured Refugio gold mine in Chile. And, right next door, the company is exploring the Aldebaran gold-copper project with partner (and affiliate) Arizona Star.

Mega-gold producer Barrick Gold was down $1.10 to $37.55, even though it was a hot tip in this week’s Business Week. Rival Placer Dome was also lower, giving up 80 cents to close at $33.90. Authorities in the Philippines announced that charges were being laid against Placer Dome personnel in connection with a tailings spill at the company’s 40%-owned Marcopper mine.

The major is also biting the bullet by laying off workers and revising operating plans at its high-cost Sigma gold mine at Val d’Or, Que.

The metals and minerals sub-index closed at 5,133.43 points, 36.21 points lower, for a loss of 0.7% over the trading period. Most of the excitement focused on Inco and Diamond Fields Resources, both of which spiked after an incorrect wire report that Exdiam shareholders had withdrawn their lawsuit against the companies. The dust settled with Inco up 15 cents to $44.35 and Diamond Fields off 20 cents to $39.

Bre-X Minerals was off $1.15 at $23.50 after releasing details of the current resource at its Busang property in Indonesia, as calculated by an independent engineering firm. The calculations show that while the property has enormous potential, much of the current resource is in the inferred category, which means that much more drilling is required to upgrade these millions of ounces into the measured and indicated categories.

Copper producer Aur Resources was another active trader this past week, posting a 20 cents gain to settle at $10.20. A few years ago, the company was criticized for placing the new Louvicourt copper-zinc mine into production without first carrying out a major underground program. But, by not waiting, the company has enjoyed well over a year of strong copper prices before the Sumitomo trading scandal caused the red metal to come under downward pressure.

Peruvian explorer Arequipa Resources was off $1.05 at $21.60 during the week as investors awaited more results from drilling at the Pierina gold project.

Trading in Aber Resources remained strong this week, with the diamond explorer posting a gain of $1.80 to settle at $20.15. A major bulk-sampling program is continuing at the company’s joint-ventured project near Lac de Gras, N.W.T. Grades to date have been impressive and the main objective now is to obtain valuations for a large parcel of diamonds.

Greenstone Resources is getting considerable attention from mining analysts now that it is has put together an impressive portfolio of mining and exploration projects in Latin America. The issue was up 60 cents at $16 over our report period.