EASTERN MARKETS — Canadian exchanges propose major overhaul

Near the end of the March 10-16 report period, the four largest Canadian stock exchanges — Toronto, Montreal, Vancouver and Alberta — announced their intention to merge.

Citing increased foreign competition and bloated costs as threats to Canadian financial markets, the exchanges agreed that each would specialize in a particular area: Toronto would remain the home to senior equity issues; Montreal would be the centre of derivatives trading; and the Vancouver and Alberta exchanges would combine to provide a single market for junior equity issues.

The changes have yet to be approved by regulators — including a wary Quebec provincial government — and likely won’t be implemented before next year.

In the metal markets, spot nickel firmed up 12 cents over the week to US$2.38 per lb. The lift prompted both of Canada’s nickel majors to post strong gains: Inco shot up $3.50 to hit $22.10, while Falconbridge rose $2.20 to $18.85.

Canada’s other base metal miners also recorded advances: Rio Algom rose 45 cents to $17; Teck’s B shares were up 60 cents to $11; Cominco jumped $2.65 to $22.60; and even Boliden rose in value, jumping 26 cents to $1.75 on news the Andalusian government may grant the company a permit to reopen its Los Frailes zinc mine in southwestern Spain, which has been closed since the infamous tailings-dam failure of April 1998.

Junior base metal explorer Nuinsco Resources slipped 19 cents to $2.83 on heavy trading over the report period and then closed at $2.49 on March 17 following the release of less-than-spectacular assays from further drilling at the Lac Rocher property in Quebec.

Gold prices were walloped over the week, dropping $7.60 to US$283.90 per oz.

on the London morning fix of March 17. Most of the slide occurred on New York trading on March 15 after the U.S. President said the American government supported the idea of the International Monetary Fund’s selling some of its 103-million-oz. gold reserve in order to aid poor countries.

All of Canada’s major gold miners showed declines over the week: Volume and value leader Barrick Gold was off $1.10 to $27.50; Placer Dome sunk 85 cents to $18.05; Kinross Gold was down 19 cents to hit $3.33; Cambior slipped 20 cents to $6.25; and TVX Gold lost 38 cents to reach $1.96 as the producer announced losses of US$66 million for 1998 in spite of improved production and cash-cost numbers for the year.

Among the gold juniors, Geomaque Explorations rose a nickel to $1.07 as the company announced the discovery of a new gold zone at the La Chicarra target, west of its San Francisco mine in Sonora state, Mexico.