Toronto Stock Exchange Firming bullion provides boost to gold index

Prospects for easing interest rates as a result of slowing economic activity spurred the gold bugs who have added almost $10 to the price of bullion during the week. The largest jump came today when bullion was set at $383.60 on the second London fix.

The metals and minerals index also advanced, gaining 10.35 pts to 3273.69 pts. The crystal balls of some analysts are forecasting a strong base metals rally sometime in the 1990s after the next recession.

Resource volume leaders for yet another week continued to be the Val d’Or triumvirate — Aur Resources, Louvem Mining and St. Genevieve Resources. Aur advanced today to $8.63 on volume of 179,463 shares. Talk is that more holes are expected any day now from the company’s copper-zinc-gold sulphide deposit in Quebec.

Louvem, which claims to have a 50% stake in the property, was also a winner, closing at $4.50. Aur is disputing Louvem’s claim, alleging that the company will be diluted to a net profits interest after failing to pay its portion of an exploration program. St. Genevieve, which holds a 56% stake in Louvem, was also firm trading to $2.19.

Audrey Resources, which controls a large copper-zinc deposit near Rouyn, Que., was quiet at $3.70 despite persistent talk that major shareholder Northgate Exploration is about to launch a bid for 100% of its shares. Audrey has just completed a new mill and mining from the deposit is expected to begin this summer.

The Northern Miner has learned that Northgate increased its stake in Audrey to 32% after buying a 500,000-share block in June. Audrey has also generated some excellent exploration results from the play — results which have caught the acquisitive eye of several companies.

Minnova is also touted as a possible competing bidder for Audrey. The company holds a 30% interest in Audrey’s Mobrun mine. Northgate and Minnova remained firm at $6.50 and $17.50 respectively.

Major gold producers welcomed the rebound in bullion. Placer Dome Inc., Canada’s largest gold producer, advanced by 38 cents to $16.63 on more than 600,000 shares. Corona Corp.’s A shares were also strong closing at $8.50. Corona has expanded into Australia and Chile via a 7% equity stake in Bond Gold, the Australian-based gold mining company which operates mines in those countries. The deal cost Corona $30 million.

LAC Minerals was unchanged at $12.25 whereas American Barrick Resources heated up, bounding a full dollar to $29.50. Cambior was also better, trading to $13.75.

Nickel giants Inco Ltd. and Falconbridge Inc. were both easier. Inco slipped to $33.25 while Falconbridge closed at $27.63. Both companies are expected to announce record second-quarter earnings shortly.

Plexus Resources expects to start producing gold early next year from its Rawhide property in Nevada. The project was stalled for two years by an ownership dispute which was recently resolved. Plexus advanced to $2.99. Financing for the company’s share of development costs is being provided by Elders Resource Finance.

High River Resources got a shot of confidence when Inco Gold decided to exercise some flow- through warrants which injected $1.4 million into the High River’s coffers. High River slipped to $1.25.

First Toronto lost a dime to $4.20. The company has decided to sell a 30% controlling interest in an Australian gold mining company. A part of the sale proceeds will likely come back to First Toronto’s shareholders in the form of a special dividend.

Copper miner Cassiar Mining was better at $4.60. The company continues to generate excellent income from its Similkameen copper mine in B.C.

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