STOCK MARKET — Base metals test new lows on Toronto market — Rising inventories take toll on prices for zinc, copper, nickel and lead

The Toronto Stock Exchange gained slightly over the report period Sept. 10 to 16, with the TSE 300 composite index adding 65.73 points to close at 6,865.25. The broad market gained about 1%, led by the transportation and utilities sectors, while the collapse in the mining indices continued. It was perhaps no coincidence that distillery issues enjoyed a good week.

Trading on the exchange was heavier than in past weeks, with the volume breaking 100 million shares on four of the five trading days.

Over the same 5-day period, the Canadian dollar lost 18 basis points against the U.S. dollar, trading at US72.02 cents at noon on Sept. 17. The Loony began a slow but steady rally against the greenback and the European currencies on Sept. 15 and 16, and rose dramatically against the Japanese yen. By the end of the report period, however, it had still not clawed back the losses suffered in the previous week.

Most of the precious metals lost ground in the London bullion markets, with palladium the lone winner, having risen $3.50 to US$191 per oz. on the morning of Sept. 17. Gold lost $1.05 to finish at US$319.95 per oz., platinum was $2.25 lower at US$421 per oz., and silver gave up 15 cents, dropping to $4.59 per oz.

The TSE gold and precious minerals sub-group was down 4.4% over the same period, closing at 7,607.08 on Sept. 16. The sub-group is now only 180 points away from its 1997 low. The busiest issue was Bema Gold at $5.45, down 75 cents, on a volume of 8.7 million shares. Affiliate Arizona Star was off $1 at $5.45 on the Vancouver exchange. Kinross Gold was also lower on heavy trading, closing down 55 cents at $5.45.

The market responded to the news that Barrick Gold would be closing its El Indio and Tambo mines in Chile by pulling the big guy down 80 cents to $29.35.

The other big guy, Placer Dome, slid $1.10 to close at $21.20. Among the sub-group’s smaller issues, William Resources was off 25 cents to $1.15, whereas Lytton Minerals shed 35 cents to close at $2.20.

The base metals were almost all lower on the London Metal Exchange as commodities-traders saw inventories rise rapidly. The biggest jump in London Metals Exchange warehouse stocks was in zinc, which had the effect of knocking the price down 2 cents to US73 cents per lb. Copper was off 5 cents to US92 cents and nickel slid 10 cents to US$2.87, both on sudden rises in warehouse figures. Even

lead, which saw a minor outflow from the warehouses, was hit for a 1 cents loss, finishing the report period at US28 cents per lb.

The TSE metals and minerals sub-group hit a 1997 low on Sept. 15, and managed to climb back to only 60 points to finish Sept. 16 at 4,786.00, for a net loss of 75.79 points on the five trading days. Of the big, integrated miners, Cominco took the worst beating, losing $3.30 to close at $33.20.

Inco closed $1.85 lower at $35.20, and Noranda was off 25 cents at $26.20.

Bucking the miserable trend were Cameco, which recovered $2.55 to $48.60, and Falconbridge, which rose 15 cents to $24.70.

The big story on the TSE junior board was Ashton Mining of Canada, which added $1.65 to close at $5.20, with 5.4 million shares blinking from one diode to the next. Ashton’s Buffalo Hills diamond project in Alberta turned up another sample with 93 macrodiamonds. Partner Pure Gold Resources was up 5 cents to 31 cents, with 20.7 million shares traded.

Mining’s O.J. trial — the protracted battle in Venezuelan courts for Las Cristinas — took another turn when Placer Dome called for tenders for construction work at the mine site. Opponent Crystallex dived $1.40 to close at $6.60, with 4 million shares on the go.