STOCK MARKETS — TSE stalls as bank rate rises

A new 14-month high in the Bank of Canada rate appears to have put a damper on eastern financial markets. On May 3, the rate jumped by 20 basis points to 6.27%, the highest level since February of last year. The increase raises the prospect of higher borrowing rates in the near future.

On Bay Street, the Toronto Stock Exchange 300 index posted a slight gain of 1.28 points to close at 4,283.61, very little-changed from the previous week. In spite of the meager gain, more than 109 million shares traded hands, topping the previous daily record of 106.3 million shares set on Feb. 3. This is the fourth time ever that the TSE trading volume has topped 100 million shares in a session.

Despite the hike in the bank rate, the Canadian dollar lost 0.27 cents to close at US72.09 cents.

The London afternoon gold fix of May 4 was pegged at US$375.15. Most of the senior golds posted increases on the week. Placer Dome posted a gain of 38 cents to close at $28.13 on a volume of more than 2.3 million shares; Goldcorp added 38 cents to $8.38; Echo Bay Mines jumped 50 cents to $15.38; while American Barrick Resources closed up 50 cents to $31.13. Bucking the upward trend were Hemlo Gold Mines which lost 25 cents to $12.25, and Lac Minerals which was also off 25 cents, to $11.38.

Several junior gold issues fared well on the week, with Kinross Gold up 13 cents to $5.75; Richmont Mines also gained 13 cents to close at $5.25, while Golden Star Resources was a big winner, tacking on $1.88 to close at $19. On the flip side, Agnico-Eagle Mines lost 13 cents to $15; Miramar Mining was down 13 cents to $5.75; and Pegasus Gold was off 13 cents to $22. Cuban gold explorer Caribgold Resources continued to plummet, hitting a new 52-week low of $3.50, down 25 cents on the week.

Investor interest is still running high in Alberta, where an ever-increasing number of junior companies are becoming involved in the Fort MacKay play. One of the early participants in the region, NSR Resources, traded more than 2.4 million shares on the week. Despite the volume, the issue only tacked on 9 cents to finish at $1.97. Meanwhile, NSR’s sister company, Tintina Mines, was also up on the period, adding 5 cents to close at $3.80.

Royalty companies were mixed, with Franco-Nevada Mining gaining 63 cents to $71.38, Euro-Nevada Mining losing 63 cents to $36.88 and Repadre Capital up 30 cents to $3.85 on a volume of 115,800 shares.

The most active issue on the week was International Platinum, which lost 92 cents to close at 28 cents on a volume of more than 12.8 million shares. Shares in the company resumed trading on April 29 after the TSE lifted a month-old cease trading order. The order was imposed because of concerns over assay techniques used by the company to analyze samples from its Black Rock precious metals prospect in Arizona.

Independent sampling by mining engineering firm Kilborn failed to locate any significant gold and/or platinum mineralization on the property. However, Kilborn did confirm that one of International Platinum’s preferred assay methods was confirmed as being a valid technique for determining the presence of gold.

Metal miners Inco and Noranda had good showings during the period. Inco tacked on 63 cents to close at $33.50, while Noranda gained 75 cents to close at $25.

Noranda affiliate Falconbridge plans to raise $1.2-$1.3 billion through a public share offering. The major is expected to subscribe to 45-50% of the issue.

Teck Class A shares lost 50 cents to $22.75. This comes after the company announced its own ore reserve figure for the Louvicourt base metal deposit near Val d’Or, Que. The Teck reserve is slightly lower in tonnage, higher in copper grade and lower in zinc grade than the figure calculated by partners Aur Resources and Novicourt.

Aur was up 25 cents on the week to $4.25, while Novicourt was off a nickel to $3.70 on a slim volume of 22,000 shares.