STOCK MARKETS — Market weakness drags TSE down

The Toronto Stock Exchange went for a long slide for the report period ended July 16, losing 156.07 points, or 3.1% of value, and closing at 4,920.59. Volumes, which had been down at summer levels, jumped back up to the 70-million range. Resource stocks fell more than the market as a whole, with the golds being hit especially hard. The major U.S. exchanges had a similar week, with the New York and NASDAQ exchanges both dropping.

The Canadian dollar was down 43 basis points against the U.S. dollar, to US72.92 cents. Both currencies fell drastically against European currencies and the yen, partly on fears that investors would be dumping U.S. and Canadian currency to buy on overseas equity markets. The German mark, which had been sliding for months, was the principal beneficiary of the turnaround in the currency markets.

Gold reached US$383.65 per oz., up 25 cents from the week before, at the fix on the morning of July 17. Platinum added $1.75, recovering to US$392 by July 17. Silver took the only fall among the precious metals, losing 12 cents on the week to finish at US$5 per oz.

The TSE gold and precious metals index lost 5.9% of its value, closing 682.51 points lower at 10,806.30. Big players fared the worst: Barrick Gold lost $3.55 to finish at $36 and Placer Dome fell $3.65 to $30.80. Smaller producers suffered less, with TVX Gold off 45 cents to $10.25, Cambior down $1 to $17.30, and Kinross Gold losing 45 cents to close at $9.80. The heavier hits taken by the bluest chips suggest that the large — and conservative — institutional investors may be moving away from the golds.

Base metals had a tough week in London, with nickel losing 15 cents on the week to close at US$3.22 per lb. on the London Metals Exchange. Copper and lead both fell 1 cents, and zinc was essentially unchanged.

The metals and minerals sub-index fell 163.78 points to 4,912.88, for a loss of 3.2% on the week. Only Inmet avoided the avalanche, adding 5 cents to close at $10. The legal dispute between Diamond Fields Resources and Exdiam, which claims ownership of DFR’s assets, continues to drag on. Diamond Fields shares continue to slide, dropping $2.10, to close at $36.25, with $47 million worth of stock changing hands. Inco, which is set to swallow up DFR, was also lower this week, dropping $2.70 to close at $41.40.

After completing the sale of Nanisivik Mines to Breakwater Resources, Alberta Energy saw its shares rise 15 cents this week, with $35.5 million worth of its shares changing hands.

Cominco shares dropped $1 for the week, closing at $62.75, with $24.3 million in trades taking place. The company recently acquired a quarter-interest in the Peruvian part-owner of a producing lead-zinc mine.

Bre-X Minerals shares were heavily traded as usual, with a volume of 4.1 million, although the price was unchanged for the week at $21.95. Bresea Resources fell 35 cents to $13.75.

Guyana Gold shares lost half of their value this week, after state-owned Zimbabwe Mining Development backed out of the Sabi gold mine project. The companies’ differences over the allocation of profit from the producing mine provoked the drop in Guyana Gold’s share price, to 50 cents from $1.

Aurignor Exploration shares rose by a full one-third this week on the Montreal Exchange after the company announced the acquisition of a mining property in Nevada in the vicinity of several major gold deposits. The company’s shares rose 10 cents, to 40 cents.

Another Montreal listing, Armistice Resources, added 19 cents to close at 56 cents, following the release of drill results from its underground development east of the Kerr Addison mine in northeastern Ontario. The company reported two mineralized intersections in a drill hole advanced from surface, with grades of 0.08 oz. and 0.38 oz. gold per ton in mineralization resembling the Kerr mine’s “Flow Ore.”