Toronto Stock Exchange Resource issues lead strong advance

Like a breath of fresh air on a humid Toronto afternoon, a 3-day rally which has added more than 100 pts to the composite index couldn’t have come at a better time. With the market testing post-crash lows and volume all but dried up, a buying binge on the New York Stock Exchange following the Memorial Day holiday, ignited the TSE.

At the close, the composite added 30.21 pts to 3,279.43 pts on volume of 31 million shares. For perspective, just two days previously, less than 10 million shares changed hands.

Little could dampen the enthusiasm, even news from the Bank of Canada that the bank rate and interest rates were going up — and will likely stay up well into 1989, according to Donald Fullerton, chairman of the Canadian Imperial Bank of Commerce.

Resource issues led the charge, driven by record commodity prices. The metals and minerals index was up 4.55 pts to 2,825.22 pts whereas gold and silver managed a healthy 25.7-pt gain to 6,661.21 pts. Gold bullion was steady at $456.75 (US) on the second London fix.

Volume leader, and a star performer this year was Inco Ltd. The issue traded an impressive 451,556 shares valued at $16.2 million. The issue closed at $35.88, down marginally from the day before. The good news to nickel players is that after Inco renegotiated a new wage contract with its Sudbury, Ont., workers, the nickel price did not collapse. Falconbridge Ltd. was equally attractive, advancing to $23.50. Base metal miner Minnova Inc. also benefited from strong commodity prices. The issue added 63 cents to $20.25.

On the gold front, Noramco Mining Corp. received some bad news from Battle Mountain Co. Battle Mountain is dropping its plans to invest $40 million in Noramco following a review of the company’s projects. Noramco gave up a dime to $4.60 whereas Battle Mountain slipped 12 cents to $20.63. Both parties are still talking, possibly towards some sort of exploration joint venture.

Sherrgold Inc. shares responded to news that the company’s troubled MacLellan gold mine in Manitoba is making money. The issue closed at $3.05. Parent Hayes Resources, which controls Sherrgold, was also better at $1.15. The mine is expected to produce 56,000 oz of gold this year and 65,000 oz next year. However, strong production results for the month of May suggest that these figures could be surpassed.

Excitement from the Iskut River- Stewart area of northern B.C., generated by Murray Pezim’s Delaware Resources (see Vancouver Stock Exchange story) is spreading to competitors in the area. Skyline Explorations which is developing a high grade gold mine at Iskut, raced to a new high of $13.75. Newhawk Gold Mines, controlled by Corona Corp., was also better reaching a new high of $8 before slipping back to $7.75.

A new high was also reached by Scintilore Explorations — but not for developing mines. The junior, which has been relatively unsuccessful in mining, is trying to get a piece of the Hemlo bonanza via the courtroom. The company’s main asset is a lawsuit against prospectors Larche and McKinnon claiming all the proceeds and benefits accrued and owed to them from the Hemlo claims they staked. Scintilore was strong at $8.

Exploration results are driving Jonpol Explorations. The issue picked up a nickel to $2.85. Jonpol has a solid property portfolio in the Garrison Twp., Ont., camp — currently one of the busiest townships in the province.

All the good news enjoyed by the market had little impact of beleaguered Abermin Corp. The issue tumbled to a low of 33 cents before scratching back to 35 cents . Burdened with a large debt load, the company was hurt last month by news that the Tartan Lake mine, operated by partner Granges, was experiencing severe problems.