STOCK MARKETS — Resource stocks left behind as TSE climbs

Gold producers and base-metal miners lost ground over the report period ended April 2, while the Toronto Stock Exchange composite index moved past the 5,000-point mark. The TSE 300 composite index gained 39.54 points (0.8%) to close April 2 at 5,024.75 points.

The Canadian dollar was strong again this past week, rising against most of the major foreign currencies. The Loony was up 0.42 cents against the U.S. dollar, closing April 2 at US73.77 cents, and had a good week against European currencies and the Japanese yen as well. The bank rate was held at 5.25%.

The London gold price spent the week retreating from the US$400 barrier and wound up at US$393.80 per oz. at the April 3 morning fix, down $6.20 from a week before. Platinum had an even worse week, falling $9.25 to an April 3 fix of US$405.25 per oz., and silver was 18 cents lower at US$5.51.

TSE gold stocks, having taken two steps forward in the previous week, took one step back during our report period. The gold and precious metals subindex closed at 12,373.28 on April 2, resulting in a loss of 378.56 points, or 2.9%. TVX Gold took it on the chin this week following the announcement of weaker year-end earnings for 1995, compared to the previous year. On the bright side, the company has recommenced operations at its newly acquired Kassandra base-metal complex in Greece. Shares of TVX shed $1.13 to close at $12, and led the golds in volume.

Placer Dome finished at $38.38, down $1.38, Barrick Gold fell $1.50 to close at $41.38, and Echo Bay Mines was down 62 cents to settle at $18.88. Two issues on the gold sub-index that bucked the trend were Teck B and Viceroy Resource; Teck may have benefited from its holding in Diamond Fields Resources and Viceroy has offered to take over Baja Gold (up 25 cents to $2.40) and Loki Gold (up 30 cents to $3.60).

The misery in the precious metal markets found company at the London Metals Exchange, where all the major base metals took losses. Nickel fell 15 cents and landed at US$3.64 per lb. on April 3, and copper was off 2 cents to $1.13 per lb. Lead and zinc both fell 1 cents per lb.

The metals and minerals sub-index didn’t take quite the beating the golds did, but was off 110.39 points nonetheless, closing at 5,303.45 on April 2.

Diamond Fields Resources was the most active base-metal issue, on a volume of 15.7 million shares. It added $4.12 to close at $40.50, taking Teck along for the ride. Inco was down $4.38 at $43, and rival Falconbridge lost 75 cents to close at $28.

After the market closed on April 2, Falconbridge announced its new offer for Diamond Fields (see front page), and the following day directors of Diamond Fields recommended acceptance of the Inco offer. At the closing bell on April 3, Diamond Fields was down 88 cents to $39.62, with 3.6 million shares traded on the day. Inco added 50 cents to close at $43.50 and Falconbridge was up 75 cents to $28.75.

Among other big miners, Noranda fell 38 cents for a close of $28.62, Cameco was down $1 to $71, and Cominco was off 25 cents, finishing at $31.62. Inmet, which announced a positive feasibility study for its Ovacik gold mine in Turkey, picked up 12 cents to close at $10.62 and Rio Algom was also higher, adding 38 cents to reach $25.38.

Shares of African explorer International Gold Resources (IGR) were actively traded this week following news that the company has signed an agreement with Ashanti Goldfields. The latter will offer IGR shareholders cash and shares valued at $6.85, based on the previous closing price of Ashanti’s Global Depository Security. Ashanti aims to increase gold production and has taken a liking to IGR’s Bibiani gold project in Ghana. Shares of IGR rose 75 cents to close at $6.25.

Junior Exall Resources edged up by 4 cents after it announced it received a positive feasibility study for the Hislop-Beatty gold property near Matheson, Ont. The company now plans to secure financing to complete additional underground drilling to upgrade resources into reserves and develop the project. Exall closed at 62 cents.