MINING MARKETS & INVESTMENT NEWS — EASTERN MARKETS — Yellow metal regains ground as nickel prices show strength — Franco- and Euro-Nevada post gains as yellow metal recovers

Riding on the back of stronger metal prices, the Toronto Stock Exchange 300 index gained 10.61 points during the report period July 28-Aug. 3 to finish at 7,033.30.

The biggest news of the week was the rebounding price of the yellow metal, which added US$3.50 to reach US$257.5 per oz. on the morning of Aug. 4. This follows a gain of $1.10 in the previous period and may augur some much-needed relief for weary producers.

Accordingly, the TSE’s gold and precious metals sub-group jumped 283.81 points to 5,156.98. Gainers for the week include: Barrick Gold, up $1.80 to $28.80; Placer Dome, up 60 cents to $15.90; and Kinross Gold, up 27 cents to $2.90. Sharing in the euphoria were royalty sisters Franco-Nevada Mining and Euro-Nevada Mining, with the former rising $1.30 to $21.40 and latter, $1.15 to $16.80. Similarly, Battle Mountain Gold jumped $1.80 to $28.80, and adding 14 cents each were Cambior, at $4.25, and TVX Gold, at $1.17.

Activity among junior producers was mixed, with Dayton Mining climbing 1 cents to 10 cents and Agnico-Eagle Mines falling 5 cents to $8.20. The latter recorded a hefty loss in the second quarter, owing to weaker production at its Laronde mine and an anti-hedging policy.

The TSE’s metals and minerals sub-index fell 10.22 points to land at 3,771.46. Nickel climbed an astounding 23 cents to US$2.79 per lb., while zinc added a penny. Lead and copper were unchanged.

Higher nickel prices translated into gains for producers Inco and Falconbridge, up $1.35 to $26.75 and 45 cents to $22.10, respectively. The latter also benefited from news that it had reached an agreement with unionized workers at its Kidd metallurgical plant in Timmins, Ont., where production has been paralyzed since the strike began in early July.

Other gainers included: Noranda, up 15 cents to $20.25; Rio Algom, which rose 35 cents to $22.5; and Teck’s B-series, which also rose 35 cents to $11.95. Teck recently strengthened its position in the zinc market by acquiring another 4.9 million shares in Cominco, increasing its stake to 40.4%. Cominco closed down the period at $24.10, a loss of 80 cents from the previous one.

Standing out among the juniors was Opawica Exploration, which rose 55 cents to $1.50 on 620,600 shares traded. The company has teamed up with Falconbridge to explore for base metals northeast of the Kidd Creek mine. However, no news was forthcoming at presstime. Rumours of its impending acquisition of new ground pushed Nuinsco up 6 cents to 81 cents. The mystery, however, came to an abrupt end on Aug. 4, when the junior announced it had nabbed the Confederation property, situated adjacent to the past-producing South Bay base metals mine, 80 km northeast of Red Lake, Ont. At presstime, the issue had dropped 4 cents.

Jilbey Enterprises, meanwhile, slipped 11 cents to 25 cents. The junior has joined Rio Algom to explore geophysical targets near the Buchans mine in central Newfoundland, in an area

near an unsubstantiated discovery by American-listed Phelps Dodge.

Laguna Gold announced it had reached an arrangement with its largest creditor for a settlement of its US$6.5-million debt. Under the agreement, Laguna will pay US$1.2 million, to be raised largely from sales of its assets, in exchange for forgiveness of the debt and cancellation of 9.9 million warrants held by the creditor. Despite the sweet deal (or perhaps in anticipation of asset sales), Laguna slid 4 cents to close at 1 cents.

On the Montreal junior board, Melkior Resources reported a $116,000 loss for the three months ended May 31. The company is continuing to negotiate with Anglo-Dutch behemoth Billiton for a financing deal on Melkior’s Congolese properties, inherited from Trillion Resources. Melkior’s shares shot up up 30 cents to close at 48 cents.