MINING MARKETS & INVESTMENT NEWS — EASTERN MARKETS — Tide begins to turn for beleaguered eastern markets — Placer Dome, Barrick among majors to benefit from renewed confidence

Reports during the Sept. 2-8 report period that U.S. interest rates may soon be lowered translated into a near-reversal of last week’s market turmoil, with the Toronto Stock Exchange 300 index rising 7.9% to end the period at 5,977.05.

Resource investors also took to the news kindly, pushing the gold and precious metals sub-index 25.6% higher to 5,424.10 points. Base metals producers were given a similar jolt, with the metals and minerals sub-group rising 441.34 points to 2,947.26.

The London Metal Exchange valued gold at US$284.15 per oz. on the morning of Sept. 9 — $4.15 more than a week ago. Although silver remained unchanged, platinum was de-valued $8 to US$360 per oz.

Taking advantage of the U.S. news and bargain prices, investors gobbled up the major gold producers: Placer Dome jumped $4.25 to $17.45 on 15 million shares traded; Barrick Gold edged ahead $4.90 to $25.45 on 14.4 million shares traded; and TVX Gold rose 85 cents to $2.75 on 10.5 million shares traded.

Royalty sisters Euro-Nevada Mining and Franco-Nevada Mining joined in the rally, with the former climbing $3 to $18.50 and the latter edging ahead $3.60 to $24.70.

Though lead and zinc remained unchanged, nickel gained 5 cents to US$1.92 per lb. and copper rose 1 cents to 76 cents per lb. Profiting the most from the higher prices was Noranda, which climbed $4.90 to $21.50. Also up were Teck B-series shares, which increased $4.10 to $13.35, Inco, which climbed $2.30 to $15.80, and Falconbridge, which gained $3.25 to close at $15.40.

Shareholders of Boliden were relieved to see the company’s value rise $1.65 to $5.30, signalling a possible end to the company’s market woes. Aside from battling low metal prices, Boliden has been fighting a tainted public image that arose several months ago when a tailings dam broke at its Los Frailes base metal mine in Spain.

Takeover target Samax Gold rose $2.20 to $7.40, marking a $3 gain over the previous two consecutive periods. The company’s shareholders were offered $7.94 per outstanding share by Ashanti Goldfields as part of that company’s friendly takeover attempt. Ashanti has already been guaranteed 43% of Samax’s outstanding shares by its largest shareholder, Adryx Mining & Metals.

Also gaining from merger talks was Trillion Resources, which rose 13 cents to end the period at 51 cents. The company plans to join forces with Vancouver-listed Oliver Gold, both of which own interests in the Segala gold project in Mali.

In diamond markets, SouthernEra Resources received a boost of $1.25, to the end the period at $6.95. The company appears finally to have put several months of troubles behind it by starting commercial production at its M1 kimberlite project in northern South Africa, which it shares with majority partner De Beers Consolidated Mines.

Low gold prices and lackluster markets have forced Sutton Resources to revise its development schedule at the Bulyanhulu gold project in northern Tanzania. While road upgrading, site preparation and drilling will continue, the company is deferring orders for plant equipment and underground construction. Sutton rose $1.75 to end the period at $5.40, though it dropped 40 cents on Sept. 9, the day the news was released.

A dispute between partners River Gold Mines and Montreal-listed VenCan Gold caused the former to rise 30 cents to $3.30, while the latter dropped 3 cents to 37 cents. The companies are at odds over River’s account of why their jointly owned Edwards gold mine lost money during the period May 1, 1996, to Dec. 31, 1997.