Toronto Stock Exchange Gold steady as crude oil prices head

Trading in gold stocks was brisk during the week ended Oct. 23 as bullion prices remained strong in the wake of falling crude oil prices. By presstime Oct. 24, the yellow metal was fixed at US$371 per oz. in London, despite a US$5.41 slide in oil prices to $28.38 a barrel. Among the more active gold issues was Consolidated TVX Mining which rose 80 cents to $4.95 after the company said it will merge with the gold producing arm of giant nickel miner Inco. The new company, to be called TVX Gold, will be 58% owned by Inco and is expected to turn out 400,000 oz. gold by 1992.

Meanwhile, shares of Falconbridge Gold, the gold mining wing of another well-known base metal producer, dropped 34 cents to $1.90.

Blue chip stocks were led higher by American Barrick which gained $1.63 to close at $21.75 on volume of 1.4 million shares. Barrick recently reported a 65% increase in its earnings for the first nine months of 1990. Rival gold producer Echo Bay Mines traded nearly half a million shares for a gain of 76 cents to $12.88.

Strike-bound Placer Dome moved up 25 cents to close at $17.25 on volume of 1.6 million shares during the report period. The company intends to close its 80-year-old Dome mine at Timmins, Ont., if striking miners do not accept its final contract offer made earlier this month. Last year, the Dome mine accounted for about 12% of Placer Dome’s gold output.

Analysts have also become concerned that Placer Dome may be unable to maintain its growth rate in the years ahead as its gold reserves become depleted. Although the company spent nearly $88 million on exploration last year, it didn’t come up with any major new discoveries.

Meanwhile, shares of Metalore Resources, Placer Dome’s joint venture partner at the Brookbank project near Beardmore, Ont., dropped $1.50 to $15 during the report period. Metalore is still at an Ontario court trial with ASE-listed Ontex over control of the Brookbank gold property.

Elsewhere among the senior precious metal stocks, Amax Gold fell $3.25 to $14.75, while Bond International Gold shed $2.13 to close at $5.38. Battle Mountain Gold also moved $1.38 lower to $8.38.

Results are expected next week from Platinova Resources’ gold property in East Greenland where operator Corona completed a major drilling program last summer. Platinova traded 540,600 shares to close up 15 cents at $1.45. Corona also tacked on 13 cents to close at $5.50.

Production officially began this month at two of Sikaman Gold’s mining projects in Ghana, West Africa. The two projects, Bogosu and Kwabeng, will provide Sikaman with about 50,000 oz. of gold annually and offer a significant positive cash flow to the company. Sikaman’s shares fell 13 cents to 60 cents.

Breakwater Resources has suspended production at its El Mochito mine in Honduras due to mechanical problems with the mine’s hoisting equipment. Production is expected to resume next month, the company said. Breakwater traded nearly 1.4 million shares to close up 14 cents at 94 cents.

A new $4.6 million exploration program is under way on Aur Resources and Societe Miniere Louvem’s base metal property near Val d’Or, Que. A $3-million drill program completed last month confirmed rich copper grades in the deposit’s main core and enhanced the tonnage also. Shares of Aur gained 20 cents to $3.35 while Louvem was steady at $3.90.

Other active base metal stocks were Redfern Resources which fell 24 cents to $3.95, and VSM Exploration which slipped 4 cents to $1. VSM is exploring the promising Grevet zinc deposit in northern Quebec while Redfern is exploring the Tulsequah Chief polymetallic property in northwestern British Columbia.

Shareholders of Trimin Resources approved a corporate restructuring plan during the report period, and will meet again on Nov. 5 to consider an offer from Billiton Canada to buy Trimin’s 32.9% interest in the Hanson Lake base metal deposit for $17.5 million. Trimin traded 109,600 shares to close down 4 cents at $1.95.

Joint venture partners Pegasus Gold and USMX recently poured the first gold from their new Casino mine near Ely, Nev. Pegasus gained 25 cents to close at $12.88 on volume of 125,200 shares.