STOCK MARKETS — Barrick soars to new high on anticipated

Despite a sluggish gold price, the TSE’s gold and silver index edged up by almost 300 points during the week ended Sept. 1 as the market took heed of optimistic forecasts for the yellow metal.

Investors loading up on shares of American Barrick Resources in anticipation of bullish brokerage reports on the company’s Goldstrike property pushed that stock to a new 52-week high of $37.50 on strong volume. According to Nesbitt Thomson’s Egizio Bianchinni, who visited Goldstrike several weeks ago, a group of gold analysts now touring the celebrated mine are in for some pleasant surprises.

“The three fundamentals — grade, tonnage and cost — are much better than I thought,” says Bianchinni.

Also hitting a new high during the report period was Pegasus Gold, which closed up $1.38 at $20.63. Investors are paying a premium for the strong management at both companies, Bianchinni says.

But today (Sept. 2), some gold stocks took a beating after bullion closed in London at US$340.45. The gold and silver index plunged 65 points as Barrick shed 75 cents to $36.75 and Placer Dome lost 25 cents to $12.50. Pegasus was unchanged.

The broad market fared better with the TSE 300 composite index advancing 29.1 points on 34.2 million shares. The metals and minerals index jumped 47.35 points.

But for Inco, a gain of 75 cents today was not enough to recoup losses earlier in the week. After its credit rating was cut, the giant nickel producer fell to a new low of $31.38, off $1.13 from the previous week’s close. The Canadian Bond Rating Service cited a depressed world economy and Inco’s high production costs as reasons for its decision.

And with supply outstripping demand, analysts don’t see much hope for the nickel price in the medium-term. A recent report by RBC Dominion Securities said that based on current inventory levels, the metal could be as low as US$3 per lb. Nickel opened today at US$3.25.

Joining Inco with 52-week lows were Westar Mining, now formally bankrupt, and Wheaton River Minerals. Both lost 3 cents, to 16 cents and 22 cents respectively. Wheaton just started drilling its kimberlite targets in Elliot Twp. near Kirkland Lake, Ont.

Noranda also lost ground, falling 25 cents to $19.38 on 725,000 shares. The base metal miner recently starting production at its small Norita East copper-zinc deposit at Matagami, Que. Noranda edged up 25 cents today to $19.63.

Gaining 8 cents to 48 cents on strong volume before dropping back 3 cents today was Breakwater Resources, which announced the discovery of a new ore zone at its El Mochito mine in Honduras. Reserves are estimated to be 2.1 million tonnes grading 11.7% zinc and 84 grams silver per tonne. Also active, on the Montreal Exchange, was Societe d’Exploration Miniere Mazarin, which gained 11 cents to 39 cents. For $34.3 million, the junior will acquire all of the Quebec government’s interest in Asbestos Corp. and will have the right to acquire Societe Nationale de l’Amiante’s interests in Bell-Asbestos and Atlas-Turner. Asbestos Corp. closed unchanged at $10 on the TSE.

Dayton Mining plunged 45 cents to $2.95. Management says it’s ready to sell the company, whose main asset is the Andacollo gold project in Chile. An unnamed international major is looking to acquire a 25% interest in the deposit for $18 million.

The top trader for the report period was United Reef Petroleums, which jumped 8 cents to 17 cents. The junior was wooing new investors in Toronto recently with a presentation on its diamond property in central Africa. Other active diamond stocks included Pure Gold Resources, down a penny to 11 cents, and Westfort Petroleums, down a penny to 8 cents. SouthernEra Resources jumped 5 cents to $1.70 today after announcing plans to buy into a diamond mine in South Africa.