Montreal Exchange Week of the plunge

With panic-selling sweeping world markets this week, investors on the Montreal Exchange could hardly be expected to react differently. Down almost 168 pt (9.5%) on “black Monday” and 99.2 pt (6.2%) the following day, the me’s general index, the market portfolio, fell almost 569 pt (27.6%) below its record high 2,063.9 pt set Aug 13 of this year. (The 168-pt dip is the worst daily decline in the me’s history; the previous record was 42.9 pt, set in 1986.) Trading, which has generally been slow the last few weeks, almost hit a combined 29 million shares for the two days.

Resource issues, which have been an important factor in the success of the me this year, also took a terrible beating, with the mining and minerals index dropping 10.1% on “black Monday” and 16% the next day. The mining and minerals index was down 30.2% from this year’s record high by the end of the week.

Announcing it has acquired an option to purchase a 40% interest in Kerr Addison Mines’ Macho- Rouleau area claim groups in Urban and Barry twps. in northwestern Quebec was Beaufield Resources, which closed down 99 cents to $ 1.25 on a volume of 101,100. Beaufield must spend $1 million on exploration before Feb 28, 1989, to earn its interest. The Kerr Addison claim groups are contiguous to the property currently being explored by joint-venture partners Beaufield and Falconbridge Ltd., which dropped $8.25 to $20.63 on 410,500 shares.

Signing the final underwriting documents of a 35 million Swiss franc ($30.5 million) convertible bond issue was D’Or Val Mines, which slipped $1.64 to $1.65 with 27,000 shares changing hands. The company says it will use the funds to further develop its Beacon gold property, which went into production this year, near Val d’Or, Que., and on exploration work at its other Quebec prospects.

Shareholders of Sullivan Mines have voted in favor of a merger which will see Sullivan swallowed up by a subsidiary of Cambior Inc. (The new company created by the merger will be called Camsul Ltd.) Sullivan, whose origins go back to 1932, closed unchanged at $7.25 on 200 shares. Cambior traded 185,600 shares and lost $16.25 to $9.25.

Encouraging results from the Lake zone have been announced by the 4-company joint venture drilling on gold property north of Wawa, Ont. Two of the companies involved are Freewest Resources and Noranda Exploration; Freewest closed down 84 cents to $2 with 116,300 shares changing hands, while Noranda moved down $10 to $24.25 on a volume of 252,200 shares. The other two partners, Cline Development and Prophet Resources, trade on the Vancouver exchange. The drilling is scheduled to continue throughout the winter.