Toronto Stock Exchange Threat of inflation needed to revive golds

The holiday-shortened week showed some signs of positive movement as the tse composite index gained 47.6 pts to close at 3,740.19 pts. Today’s trading saw an advance of 6.72 pts. Precious metals, which are the catalyst behind the revived mining sector, showed some strength as golds regained some of the ground lost during the month of June — a month that left more than a few traders bloodied. Prices in London hovered around $451(US); up $14 from a low of $437 reached last week.

To no one’s surprise, the firming bullion price was sparked by another bout of U.S. dollar weakness which saw the buck drift lower against every major currency except the Japanese yen. What gold will need, however, for any major upside breakout will be a healthy dose of good old 1981-style inflation — or at least the threat of such occurring again. In Canada, Bank of Canada governor, John Crow, noted that inflation here is running at a higher rate than in most western countries (about 4.8%).

Firming gold prices led to improvement in share prices, which have suffered considerably during the past month. Campbell Red Lake Mines picked up $1.88 to $34 in active trading. Other majors were also stronger. Echo Bay Mines added $1.50 to $47 while Lac Minerals was up 50 cents to $40.38.

St Andrew Goldfields, which has struggled with its gold property in Ontario for more than four years, finally announced a production decision. The issue responded by gaining $1.50 to $7.50. Belmoral Mines is going back to the equity markets seeking $26 million via a units offering, part of which is being placed in Europe.

A fine success story can be found in Getty Resources. Last October the company completed a unit offering in Europe at $5.50 each. Today, the shares alone are near their high, closing at $13.25. The warrants are at $4.75. The interest in this company is being generated by a 49% stake in the Tundra gold project operated by Noranda Inc. in the N.W.T. Noranda is operating a major 90,000-ft drill prorgam (see front page story) which continues to meet with success. So successful is this project to date, that many observers are seeing a Hemlo-size gold deposit being built here — an outlook which is very bullish for Getty.

Scintilore Explorations which is trying to get into the Hemlo camp via the Supreme Court of Ontario, was quiet at $3.25. At the company’s annual meeting, a lawyer for the company said that examination of discovery will probably take place sometime this fall with the actual trial possibly starting one year from then.

Sullivan Mines advanced to $6.75; a move which reflected the increased offer tabled by St Genevieve Resources, a Montreal Exchange-listed company. The junior has increased its offer for a minimum 51% of Sullivan from $6.62 per share to $7.25 per share. Cambior Inc, which holds the crucial 31% stake in Sullivan, traded at $25.50. A Cambior official told The Northern Miner that the offer was being discussed by his board today.

A raucous annual meeting at Canhorn Mining delayed proceedings by more than three hours as a dissident shareholders’ group argued with the board about disclosure of drill results. The issue gave up 62 cents to end the day at $5.38. SherrGold Inc., control of which has been acquired by Agassiz Resources, lost ground to $5.75. Agassiz, which is paying $32 million of a 59% interest in the company, was also easier at $4.25.

Metall Mining, which is a newly- listed affiliate of the giant West German firm, Metallgesellschaft AG, traded around the $12 range. Metall plans to explore both base and precious metal properties in Canada.