Toronto Stock Exchange Earnings picture, dollar take toll on

Uncertainty caused by a slowing economy and rising interest rates continued to take its toll during the week ended April 17 on The Toronto Stock Exchange as the composite 300 index gave up 36.88 points to close at 3476.42. Analysts believe 3500 was the point of resistance. Now that it has been reached, the market will continue in a southbound direction. The poor earnings outlook for companies and high value of the Canadian dollar have also combined to depress volumes in the Metals and Mines index, which was down 13.74 points closing at 2971.48.

There was also no relief in sight on the precious metals front as gold lost US$1 before closing at US$374.50 an oz. on the second London fix. However, the gold and silver index offered a boost to the big producers gaining 24.71 points.

Pressure on earnings of Noranda and Inco could make 1990 the year of bottom fishing, says Thomas Komlos, base metals analyst at Levesque Beaubien Inc. in Toronto.

“Investors should be able to pick up stocks at bottom values,” said Komlos who believes that most of the big companies, while still profitable, are laying a decent foundation for a turnaround in the 1990s. Falling into that category, he said, are Inco and aluminum producers like Alcan.

However, Noranda shares responded to pressure from its ferrous product area and expectations regarding a poor first quarter, by dropping to a 52-week low of $19.88.

Also hitting a new low was Audrey Resources, the Rouyn- Noranda, Que., polymetallic producer which is currently attempting to finance a bid for the Canadian and U.S. mineral assets of Asamera Minerals. Audrey shares dropped to $2.50.

The current market malaise made it a bad week for Thunderwood Resources and Greenstone Resources to announce what they regard as a significant discovery on their Scott Lake property in Chibougamau, Que.

A new copper-rich, stringer sulphide alteration zone appears to have all the ingredients for the future discovery of a massive sulphide deposit on the property, according to Thunderwood. But as indicated by trading of Thunderwood and Greenstone shares, investors are playing wait-and-see with this one. Greenstone remained steady at $5 while Thunderwood edged up 4 cents to close at $1.19.

Meanwhile, two of Canada’s best-known gold producers were announcing some significant changes within their senior management ranks. At the annual meetings of Dickenson Mines and affiliate Wharf Resources, John Kachmar resigned as president of both companies in what could only be described as unfriendly circumstances.

While Kachmar remained tight- lipped, lawyer James McCartney was accusing Dickenson Chairman Robert McEwen of forcing the resignation. Speculation that the boardroom shuffle is a prelude to a merger of Wharf and Dickenson should keep analysts and shareholders interested.

Dickenson A and B shares both lost ground closing at $5.13 and $5.25 respectively as Wharf gained 13 cents to end the week at $6.63. Under altogether different circumstances, American Barrick Resources appointed its chief executive officer Jerry Garbutt as president of Horsham.

He is making the move because of former President Ian Delaney’s decision to return to merchant banking. Horsham is the company that controls Barrick. Trading on slightly more than 220,000 shares, Barrick closed up 37 cents at $21.25.

As the annual meeting season is now in full swing, shareholders of Flanagan McAdam Resources, McNellen Resources and Muscocho Explorations were able to vent their frustration over operating problems at the companies’ gold mines in northern Ontario.

At two separate meetings, shareholders gave the green light to a restructuring plan in which Echo Bay becomes operator and majority owner of the Magnacon and Magino mines.

“Everything that could go wrong did go wrong,” said Muscocho President Terry Flanagan who in partnership with Jack McAdam is part of a highly respected exploration team. Flanagan and Muscocho ended the day at 50 cents and 54 cents respectively, while Echo Bay gained 63 cents to close at $17.88.

Meanwhile, at a packed LAC Minerals meeting in Toronto, President Peter Allen was preparing shareholders for low earnings as a result of a renewed exploration drive over the next few years.

Future plans include a $23- million exploration program at the El Indio gold mine in Chile which was captured when LAC acquired a 65% stake in Bond International Gold. LAC ended the wee up 25 cents at $13.