Toronto Stock Exchange Placer Dome offering $262m to buy Mt.

The price of gold bullion remained relatively stable during the week ended Sept. 4 as tensions in the Middle East appeared to have eased somewhat with the release of Western women and children held hostage in Kuwait and Iraq. At presstime, the gold price had eased to US$383.30 on London’s second fix, down nearly $2 from last week’s close of $385.40. But the price of oil rose to US$29.12 on news that American warships had halted an Iraqi freighter as part of the trade embargo against Iraq in the Gulf of Oman. Analysts say any new increases in the price of crude oil will likely prompt fears of higher inflation, and that’s generally bullish news for gold.

Volume leader during the report period was Canada’s largest gold producer Placer Dome. It traded more than one million shares to close at $20.13. The mining giant has launched a takeover bid for Continental Gold in order to gain control of the huge Mt. Milligan copper-gold deposit in British Columbia (see story). The deposit, well located near road transportation, has the potential for a 400,000-oz.-per-year open pit gold mine.

In two separate deals, Placer has agreed to buy a 30% stake in Mt. Milligan from BP Canada (TSE) for nearly $79 million. The remaining 70% is being acquired from Continental Gold for about $183 million. Placer is offering one of its shares, or $20 cash, in return for each share of Continental Gold tendered. The takeover would result in a resolution to the litigation between BP and Continental Gold.

Shares of Continental Gold rose $2.88 to close at $19.63 on volume of 359,900.

Meanwhile in Toronto, Metalore Resources began court trial on Sept 4, with ASE-listed Ontex Resources over control of the Brookbank gold deposit near Beardmore, Ont. Shares of Metalore closed at $19, almost unchanged from last week. Placer Dome is earning a 50% stake in the Brookbank deposit from Metalore.

Financially troubled Muscocho Explorations traded 412,100 shares to close unchanged at 15 cents, while Flanagan McAdam rose 3 cents to 25 cents after the companies announced they have signed a letter of intent with Hemlo Gold. The deal calls for the latter company to buy Flanagan McAdam and Muscocho’s interest in the Magnacon gold mill for $9 million.

Other junior golds posting gains in the report period include Greenstone Resources, up 30 cents to $4, Central Crude up 38 cents to $5.38, and Equinox Resources up 23 cents to $1.60. An active trader in recent weeks has been Bema Gold which rose 10 cents to $4 on volume of 559,500.

Selling pressure on Canamax Resources (TSE) drove that issue 9 cents lower to $1.05. The company expects to announce a significant reserve reduction at its Kremzar mine which is closing. A 47% control block of Canamax shares held by Amax Gold is also being sold to parent Amax Inc. for $7.4 million cash, or about 67 cents per share.

There is no sign of relief in sight for debt-plagued Noranda as its shares sank to a new low of $16.75 during the report period, down $1.25 from last week. Noranda reached a high of $38 back in 1987 but now appears to be headed for the previous low of $11.50 it hit during the 1982 recession.

High interest on the debt LAC Minerals acquired last year from its purchase in Bond International Gold appears to be adversely affecting the company’s stock price. The issue shed 25 cents to close at $11.

Agnico-Eagle Mines recently completed a public offering of 3.2 million units worth $27.6 million. Each unit cost $8.62 and consists of one common share and one-half share purchase warrant. Shares of Agnico-Eagle fell 25 cents to $7.63.

In the junior base metal area, Timmins Nickel pulled 40 ft. grading 3.44% nickel in a recent drill hole on its Langmuir No. 1 deposit, south of Timmins, Ont. A total of 222,500 shares traded hands for a gain of 20 cents to close at 70 cents. Elsewhere, newly listed Great Lakes Minerals began an 8,000-ft. drilling program on its Keweenaw copper project in Michigan. Great Lakes was up 3 cents to 33 cents.

Senior nickel miner Inco traded 401,500 shares and fell 25 cents to $32.50 after the company reported an accident at its P.T. Inco Indonesia smelter. The company is evaluating the accident, which killed six workers, to determine the effect on this year’s output of 70 million lb. of nickel in matte.

Preliminary trading figures for The Toronto Stock Exchange indicate August’s monthly volume was down 17% from the same period last year, while the total value traded fell by 28%, compared with August, 1989.