EASTERN MARKETS — TSE moves higher despite rut in resource stocks

The Toronto Stock Exchange was higher over the report period Feb. 17-23, with the retail and manufacturing stocks leading the way. The TSE 300 composite index added 68.26 points, or 1.1%, to close at 6,454.74 on Feb.

23. But the week was unkind to the base metals and golds, and to resource stocks generally.

The metals and minerals sub-group was 60.61 points lower, at 2,882.70, despite a sharp improvement in the nickel price. The metal was up 18 cents on the five trading days, for a morning price of US$2.21 per lb. in London on Feb. 24. Inco benefitted, rising 15 cents to close at $16.80, but Falconbridge did not, falling 5 cents to finish at $15.55.

The copper market stayed weak, with the red metal down another 1 cents to US62 cents per lb. on the London Metal Exchange. The copper-sensitive miners fell too, with the biggest, Noranda, shedding 80 cents to close at $15.80, Inmet Mining, off 32 cents at $1.80, and Aur Resources, 5 cents lower at $1.95. Rio Algom escaped, holding at $15.50.

Gold prices were slightly firmer over the report period, as the yellow metal added 75 cents to reach US$286.10 per oz. in the London morning fix. The platinum metals went opposite ways, with platinum up strongly — US$384 per oz., up $21 — and palladium down $2 to US$348. Silver was up 11 cents at US$5.50.

The stronger gold price didn’t translate into gains for the gold stocks, as the TSE gold and precious minerals sub-group slid 163.55 points to finish at 5,465.96.

Sutton Resources stood out in a losing cause, adding $5.05 to close at $12.05 after a friendly takeover bid by Barrick Gold. Sutton saw 9.9 million shares move over the five trading days, taking the crown as most active mining stock on the TSE. Barrick’s bid of 0.463 Barrick shares for one Sutton, with Barrick closing $1.80 lower at $26.80, now effectively values Sutton at $12.41.

Other gold issues were generally lower. Placer Dome was off 55 cents at $17, Cambior was down 70 cents at $6.10, Kinross Gold fell 21 cents to $3.37, and TVX Gold slipped 5 cents to $2.03.

The market saved its real punishment for Greenstone Resources, which tumbled 12 cents to 61 cents, and for Royal Oak Mines, which fell another 9 cents to 15 cents in heavy trading. The latest blow to debt-ridden Royal Oak was a delisting from the American Exchange, which told the company that it no longer met the exchange’s criterion for continued listing.

Industrial minerals miner Asbestos Corp. fell $12 to close at $10.50 in the wake of a decision in the Ontario Court of Appeal that the 1982 buyout of shares in the company by Societe Nationale de l’Amiante, a Quebec Crown corporation, was not a takeover bid. This decision relieved SNA of the obligation to buy out the remaining minority shareholders of Asbestos Corp.