STOCK MARKETS (June 15, 1992)

Shares of SouthernEra Resources and Aber Resources shot up to new highs during the week ended June 9, as more companies moved into the Northwest Territories to stake claims around Lac de Gras and beyond.

Well positioned next to the diamond find of Dia Met Minerals and BHP-Utah Mines, Aber advanced to $2.50 on The Toronto Stock Exchange with 1.4 million shares changing hands. Hopes that more diamonds will be found on the 10 million acres now staked in the Yellowknife, N.W.T., region, pushed SouthernEra to a high of $2.10 on just over one million shares traded. Sources close to the action say a CBC interview with Christopher Jennings, geologist and president of SouthernEra, did much to fuel this week’s brisk trading activity. During the interview, Jennings said he believed the Dia Met issue, which traded as high as $18 this week, will eventually rise to $50. However, officials at BHP-Utah were giving anxious investors no indication as to when it will reveal what experts in San Francisco think the Dia Met gem stones are worth.

Sudbury Contact Mines maintained recent gains sparked by the discovery of 14 microdiamonds near Kirkland Lake, Ont. It closed at $2 today (June 10) after trading in a range of $1.95-2.10.

More than one million shares of Tyler Resources were exchanged during the report period after the company picked up a second property (106,000 acres) in the Lac de Gras area for $150,000 cash and 200,000 shares. However, the Tyler issue remained stalled at 25-30 cents and closed today at 29 cents. Aside from diamonds, the Westray coal situation and the strike at Royal Oak Mines’ Giant gold mine near Yellowknife continued to make headlines this week. So too did RTZ decision to sell its 50.5% interest in Rio Algom. News that RTZ is bailing out of Rio Algom to avoid any “conflict of interest” with other North American assets, including wholly owned Kennecott, shaved $1.38 off Rio Algom shares on the first trading day after the announcement. But the Toronto company quickly bounced back to end the week at $16.25, up from $15.12.

Other active stocks included Redfern Resources. It plans to begin a $1.5-million exploration program on the Tulsequah Chief property after agreeing to purchase a 60% interest it didn’t already own from Cominco. Up 15 cents today to $2.95, Redfern says the purchase will be completed by month-end.

On the broad market, a combination of high unemployment and the constitutional stalemate made for some directionless trading even though interest rates are at the lowest level (7.25%) since June, 1973. Today, Toronto’s composite 300 index gave up 17.46 points to close at 3368.36 after 24.8 million shares valued at $360 million had changed hands. Gold closed at US$337.65 per oz. in London after falling US$2 this week. Although platinum was down US$9.50 per oz. to US$367.25, a number of analysts are predicting that the precious metal could hit US$400 per oz. later this year. Bullish sentiment is based on expectations of strong demand in the auto industry and political strife in South Africa and Russia where 85% of world supply is produced.

After a 4-year trading absence, Comaplex Resources hit a new high of $4.50 this week. Shares of the Calgary-based company are back on the trading board because the Ontario Securities Commission has ruled that a Swiss bank (Kantonalbank) was responsible for an illegal takeover of Comaplex in 1987. Gold miner Cambior announced that a preliminary short-form prospectus will be filed with regulatory authorities in each of the 10 provinces related to a $39.4-million share offering. In sympathy with the softer gold price, Cambior fell 13 cents today to $7.63.

The Montreal Exchange, second among Canadian stock exchanges in terms of share value traded, reports that the value of shares traded in May totalled $1.78 billion, up 9.9% from April and up 27% from May, 1991.