Toronto Stock Exchange Gold bullion’s rise fails to spark trading

Bullion registered a strong $9 gain this week to $444.80 (US) on London’s second fix today. Gold reacted to a sell-off of U.S. dollars and renewed hostilities between Iran and Iraq in the Persian Gulf. The so-called cease fire, which lasted less than 24 hours, gave oil prices a modest boost. The oil price hike sparked renewed inflation concerns which also aided gold.

Despite the bullion advance, trading continued in a sloppy directionless pattern. Volume was 18.9 million shares today. The TSE composite index added 5.14 pts to close at 3,420.84 pts — essentially unchanged from last week. Metals and minerals weakened to 3,148.18 pts whereas gold dipped to 6,670 pts; off 9.86 pts on the day.

Falconbridge Ltd. continued an institutional favorite, trading more than 1.6 million shares this week to top our most active list. The issue gave up 13 cents today to $27. John Lydall, mining analyst at First Marathon, pegs Falconbridge as the most highly leveraged base metal company in Canada.

Inco Ltd. remained strong, closing at $40.38. Both Inco and Falconbridge are enjoying very healthy nickel prices. That metal is displaying the best fundamentals of any base metal.

On the gold side, no Canadian company can match the financial clout of Placer Dome Inc., which will be sitting on a capital pool of more than $900 million following the closing of its deal to sell a large piece of Falconbridge back to Falconbridge. Placer Dome gave up 25 cents to $17. Lac Minerals remained unchanged at $14.63.

Another analyst’s favorite, Cambior Inc., bucked the downtrend by trading to $16.38; up 13 cents for the day. Cambior is opening its Eldrich- Flavel gold mine in Quebec next month. Also, the company just received a tidy payday of $52 million. The cash comes from Dickenson Mines which bought Cambior’s interest in the Arthur White mine. American Barrick Resources was marginally easier at $23.63.

Northgate Exploration is sinking more than $40 million into the ABM-Sonora group (see front page story). The investment is Northgate’s largest to date, after selling its Chibougamau, gold-copper mines to Western Mining Corp. last year. Sonora Gold, which operates an open pit mine near Jamestown, Calif., has been troubled since day one by strict environmental problems. The issue was better to $3.85. Northgate slipped to $7.63.

Madeleine Mines failed to make its production target date at its Lac des Iles palladium-platinum property north of Thunder Bay, Ont. Earliest production will be sometime next year. The issue was stronger at $4.40.

Rouyn Mining Corp. is poised to become a significant Quebec gold producer. With production from one mine coming on stream this year and a large 1,500 tpd mill planned for next, the company has some big plans for the future. The issue was steady at $3.60 — up a nickel for the day. Golden Knight Resources was also better at $10. The company has a 40% stake in the Golden Pond gold mine in the Casa Berardi area of Quebec which will be producing gold this summer.

Last week’s deal between Camindex and MVP Capital has hurt both issues. Camindex dipped to 16 cents whereas MVP tumbled to a new low of 85 cents . MVP is planning to takeover Camindex and inject $14 million via two loans. Camindex has an interst in an Alaskan placer gold operation.