Buyers back after a round of profit-taking Toronto Stock Exchange

Despite a surge of buying in golds, which moved the gold and silver index to within a hair of the 5600-pt level earlier in the week, a sell off today depressed the index to 5900.79 pts — off 51.3 pts for the day. Metals and Minerals were marginally better, adding 13.96 pts to 3456.17 pts.

Golds initially reacted to a firming in bullion prices, which were quoted at $404.20(US) per oz on the second London fix. Most senior issues managed to hold on to the recent much-needed gains.

American Barrick Resources was better at $23.50, up 25 cents today. Barrick has arranged a one-million- oz gold loan for its Goldstrike development in Nevada. Placer Dome Gold was steady at $16.63.

In Quebec, Dumagami Mines is meeting with a successful start-up at its new gold mine (see front page story). The company, which is controlled by Agnico-Eagle Mines, produced more than 15,000 oz of gold during its first three months of operation. The issue was easier at $12.63.

Another company in the Agnico fold, Goldex Mines, was hurt by news that its deposit near the Dumagami mine, is uneconmic at current gold prices. The issue promptly dived to $1.20 before recovering to $1.40 today. Goldex rock was supposed to be trucked to the Dumagami mill for processing.

Hemlo Gold Mines was also stronger, trading at $12.50. Earlier in the month, the issue was well below $12. Hemlo is one of Canada’s lowest cost gold producers and its considered especially attractive during periods of instability in bullion prices. In fact, at current prices, many start-up hardrock projects in the Canadian Shield with grades below 0.2 oz gold per ton are probably uneconomic.

Last week we noted a forecast that zinc prices could touch the $1-per-lb mark. Today the man who issued that forecast, Raymond Goldie, an analyst with Richardson Greenshields, reaffirmed his belief.

He predicts the $1 barrier will be breached by the second quarter of this year. If this comes to pass, then we haven’t seen anything yet in the base metals sector. The stars of ’88 will look even brighter in 1989 as producers of copper, zinc, lead and nickel wallow in record earnings.

Investors in base metals took a breather today, as most issues closed below their record highs — in many cases reached during the past week.

Cominco Ltd., probably the best zinc play around, was firm at $26.38, off 37 cents . Brunswick Mining & Smelting, a company controlled by Noranda Inc., was also steady at $14. Brunswick, a major zinc producer, operates one of Canada’s largest mining complexes in the Bathurst area of New Brusnwick. Pine Point Mines, which is still processing stockpiled zinc ore from its shutdown mine in the N.W.T., was stronger today. The issue advanced 25 cents to $33.75. Teck Corp. A shares were modestly weaker at $20. Teck is a major shareholder of Cominco.

Other significant producers of copper and zinc include Mineral Resources International. MRI was steady at $5.63. Metall Mining was slightly easier at $11.88.

Nickel miners Falconbridge Ltd and Inco Ltd. were also strong. Inco closed at $34.25, off 13 cents today whereas Falconbridge was better at $28.75. Inco’s shares reached a price of $35.13 earlier in the week — the highest level since paying out a record $1 billion (US) to shareholders in the form of a special dividend late last year. That dividend, which amounted to $10(US) per share, was announced when the shares were trading at $33.

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