Toronto Stock Exchange (November 18, 1991)

A big drop in interest rates brought absentee investors back into the equity markets during the week ended Nov. 12 and sent share prices shooting upward. Although interest-sensitive financial and utility issues were setting new highs for the year, weak base metals prices prevented all but a handful of mining stocks from joining them.

Down 4 cents to US$3.30 per lb., nickel is still well below the 1990 average of US$4.02 despite attempts by Inco and Falconbridge to cut production and labor costs. At US48 cents per lb., zinc is also substantially below its 1990 average of 68.9 cents

However, according to BBN James Capel analyst Victor Lazarovici, metal issues are faring much better than commodity prices would make it seem. Up 25 cents to $19, Noranda is $1.38 shy of its yearly high. Inco also posted a healthy $1.25 gain this week to close at $38.50. Cominco added 63 cents. More than 2.7 million shares of Sherritt Gordon changed hands this week after the company reported a 9-month profit of $3.4 million. The week’s volume leader, Sherritt Gordon advanced by 38 cents to $7.88. Boosted by earnings and financing plans for the Hycroft Resources project in Nevada, Granges Explorations also made the active list while remaining stalled at $1.25. “Once interest rates bottom out, fund managers will be looking around for other classes of stocks (such as mining and metals) to move their money into,” said Lazarovici.

Meanwhile, Toronto’s composite 300 index closed down by 7.2 points today, Nov. 13, to end a winning streak that took the index to 3,600 points, its highest level since last summer. The index closed at 3,596.9 points with 32.7 million shares worth $387.7 million changing hands.

Driven by a US$2.05-per-oz. advance in the gold price (and a US$1.40-per-oz. spike in the price of platinum), a number of precious metals issues made the active list. Trading more than one million shares, American Barrick Resources added $1 this week to close at $28.13, while Placer Dome and LAC Minerals added 13 cents and 75 cents, respectively. Gold closed today at US$356.55 per oz. in London.

As investors anticipated a resumption of drilling at Fort Knox Gold’s Shining Tree, Ont., nickel-copper project, 740,000 shares of the junior changed hands this week. But the issue gave up 19 cents to close at $1.10. Equal partners Queenston Mining and Noront Resources have agreed to earn a 100% interest in a 31-claim property adjoining Fort Knox’s Fawcett Twp. ground to the east. The agreement calls for $300,000 to be spent within two years on the optioned ground. Queenston ended the week at $1.01. Euro-Nevada Mining (TSE) has purchased a 2% net smelter return royalty on the 20,000-acre Getchell gold property in northern Nevada from Northern Goldfield Investments for US$7 million. Euro-Nevada added 50 cents during the report period to close at $14.75.

In other news, production is expected to resume soon at Breakwater Resources’ El Mochito lead-zinc mine in Honduras following the resolution of a labor dispute. The strike halted production for two weeks.

Great Lakes Minerals peaked at 55 cents this week as the company considered possible destinations for the copper it hopes to mine from its Keweenaw project in northern Michigan.