STOCK MARKET — Gold stocks left behind as TSE hits the heights — Base metals rise slightly in buoyant market

The Toronto Stock Exchange’s hot streak continued in the report period July 30-Aug. 5, with the TSE 300 composite index rising 101.91 points (1.5%) to a record high close of 6,903.08 on Aug. 5. Trading was heavy on the first two days, with volumes of 130 and 113 million shares, but settled around 80 million on the last two days of the period.

Real estate, pipelines, and the oil and gas stocks led the TSE, with the metal miners making modest gains and the golds falling again. The Canadian dollar, which was strong for most of the period, faded on Aug. 5 and 6 to finish 29 basis points lower against the U.S. dollar at US72.11 cents but continued to gain against the other major foreign currencies.

The London morning fix for gold on Aug. 6 was US$318.85 per oz., down $7.55 from the previous Wednesday. The yellow metal was hit by producer selling and by the strong U.S. dollar, which pushed down the dollar-denominated price.

(Since July 2, the U.S. dollar price of gold has fallen almost 4%, while its price in German marks has risen 3%.)

Silver, which had spent the previous five days on an upswing, fell sharply on Aug. 6 to finish the report period at US$4.34 per oz.

The platinum group metals were still flying, with platinum $6 better over the same period at US$432 per oz. and palladium up a powerful $19.50 at US$227.50.

The TSE gold and precious minerals subgroup fell 112.38 points, or 1.4%, over the report period, closing on Aug. 5 at 8,131.23. Placer Dome headed the active list, with 3.9 million shares traded and a gain of 5 cents to $23.15.

Barrick Gold was off 55 cents at $30.40, TVX Gold shed 30 cents to close at $6.05, and Kinross Gold was 15 cents lower at $6.20.

Among the smaller gold miners, Rayrock Yellowknife Resources was 35 cents higher at $5.60, and Royal Oak Mines rose 20 cents to $2.45. Glamis Gold was 85 cents lower at $9, Golden Star fell 60 cents to $8.50, and Dayton Minng was off 35 cents at $4.15.

Perhaps winded after late July’s excitement, the base metals were mainly lower on the London Metal Exchange during the report period. Nickel was the principal casualty, falling 14 cents to US$3.22 per lb., while copper was off 3 cents and lead and zinc both lost 1 cents.

The TSE metals and minerals sub-group closed at 5,480.71 on Aug. 5, a gain of 45.84 points that lagged the broad market. Inco was 30 cents lower at $43.20, while Noranda added 25 cents to close at $29.90. Falconbridge, whose Sudbury operations are currently shut down by a labor dispute, fell 45 cents to close at $29.35.

Small producers were also stronger, with Westmin up 20 cents to $6.50 and Breakwater Resources 40 cents higher at $6.90. Breakwater announced it was buying the Bougrine and El Toqui mines from Inmet, which was 5 cents lower at $7.90.

The most active junior on the exchange was Crystallex, which added 65 cents to close at $5.85. Other Toronto-listed juniors with large price moves included Laguna Gold, 15 cents higher at 35 cents, and Indonesian explorer Scorpion Minerals, up 95 cents to $2.75.

On the Montreal Exchange, Maude Lake Exploration was 13 cents higher at 38 cents, but there was no news from the company which might account for the rise. Its affiliate, McWatters Mining, announced that Placer Dome had reduced the purchase price of the Kiena and Sigma gold mines in northwestern Quebec to US$55 million from US$75 million. Of this, McWatters must come up with US$45 million in cash and can issue US$10 million in shares to Placer Dome.

Montreal-listed junior Jilbey Exploration, which announced it was withdrawing from a joint-venture project in Kalimantan, Indonesia, was off 8 cents at 16 cents, neatly erasing its gain in the previous trading period. Jourdan Resources, which had also been a strong gainer on the ME a week before, was off 10 cents to 25 cents.