Toronto Stock Exchange Gold soars higher on skittish U.S. dollar

The disturbing tumble of the U.S. dollar and the failure of the Fed to effectively curtail the free fall by boosting interest rates, continues to fuel the stellar performance of gold bullion. The price continued on its winning way, smashing through $470(US) per oz and reaching a high of $480, before settling back to $472 at the close today. Last week, the bullion price hovered around $458 per oz.

Most gold issues opened up stronger, but quickly reacted to the downturn in bullion prices by midday. At the close, the gold and silver index was down 1.55% to 9,359.96 pts. For the week, that’s still up a healthy 166.87 pts. The tse 300 composite index dipped 1.18% to 3,720.34 for the day.

American Barrick Resources continued to soar, reaching a new high of $57.25 before settling back to $54.88 at the close. Wood Gundy analyst Electa Aust is bullish on the stock and is calling a short term price rise to $65-$70. The bullishness comes on news of strong holes from the company’s Goldstrike property in Nevada. Ms Aust estimates the deposit could host 15 million tons grading up to 0.3 oz gold per ton, or up to 4 million oz of gold — equivalent to Hemlo’s fabulous Golden Giant mine.

Franco-Nevada, which holds a royalty in the Goldstrike property, was also better, closing at $14.38; up a dollar on the week. Speaking of Hemlo, many investors appear to be liking Scintilore Explorations law suit against the two prospectors who staked the bonanza. Scintilore, which is claiming all the royalties and benefits accruing to the individuals, hit a new high of $3.85 on volume of 253,920 shares. When the case was first announced, the issue traded at $1.60.

Getty Resources was also active as it approached a high of $14.75. The issue opened up at $14.38 before dipping to $13.63 at the close. Three more drill holes from the company’s joint-ventured Tundra project in the N.W.T. were released by partner Noranda Inc. The holes are confirming what most already know — that this deposit is going to be big with the potential for well over 6 million tons. Some of the better holes included a 24.3-ft section grading 0.26 oz gold per ton and 65.6 ft assaying 0.19 oz gold, both from depths of more than 3,700 ft. A $6.3 million drill prorgam should generate new reserves by year-end, the partners say.

On the platinum scene, Madeleine Mines continued to surge, as it stormed through $11 to close at $11.25 — a new high. Talk is of platinum production this year from the company’s Lac des Iles project north of Thunder Bay, Ont. In March, Madeleine was quiet at $4.50. However, an official production announcement has yet to be made.

Pine Point Mines was also active, following news that the company has made a $90 million offer to Cominco for the latter company’s interest in the Polaris zinc-lead mine in the N.W.T. Pine Point was better at $13.75. Highland-Crow Resources remained steady at $11. The company has dewatered the underground workings at its Pickle Crow property, Ont., to the 250-ft level. A 30,000-ft underground program is expected to start this month. The work will attempt to prove up reserves in all engineering catagories of 7.2 million tons grading 0.226 oz gold per ton.

One fund which is reflecting the strength in most junior precious metal issues is Resource Capital International, which new highed at $18.25. The warrant was also strong at $9.75. Way back last November when the issue hit the streets, those same warrants could be had for less than $2. Nor Acme Gold Mines, with a thin 3.7 million shares issued, appears unable to move beyond the $1.80 range. The company recently announced a deal which will see a B.C. company explore its Snow Lake gold mine, which was shut down in 1958. Nor Acme gets carried to production. Also, the new company doing the work is headed by Brian Mountford, an ex-officer of Brohm Resources and an individual of considerable talent in bring mines on stream.