STOCK MARKETS — Base metal stocks post healthy gain, gold

A mini-rally in the base metal mining sector resulted in a modest gain for The Toronto Stock Exchange during the week ended Dec. 1.

In one of its best performances of the season, the metals and minerals index jumped to 2754 for a gain of 140 points. Today, Dec. 2, the index tacked on another 23 points. The TSE’s 300 index added 14 points before losing most of those gains today, when 41 million shares changed hands. Among the winning blue-chip issues were Cominco, up $1 to $18.38; Inco, up $1.25 to $27.25; and Noranda, up $1 to $18.25.

Inco and Noranda added another 25 cents and 63 cents respectively today. Nesbitt Thomson’s Julian Baldry says the mining sector is at the threshold of a traditional year-end rally that has been given an extra boost by signs of recovery in the U.S. He says institutional investors have been underweighted in the cyclicals and are now beginning to add resource stocks to their portfolios.

But Baldry cautioned that the upswing will be short-lived unless the global economy recovers. “We are in a stock market rally that will eventually peter out unless the economies of Japan and Europe improve.”

By contrast, the gold sector seemed hardly worthy of a yawn as the yellow metal closed unchanged at US$335.25 in New York. Heavily weighted by market darling American Barrick Resources (TSE), the gold and silver index managed to eke out a 37-point gain.

Barrick, up $1.38 to $36, recently finalized a joint venture agreement with Newmont Gold to develop common ground along the northern sector of the Carlin Trend in Nevada.

But fellow favorite Placer Dome took a tumble after the government of Papua New Guinea threatened to increase its interest in the Porgera mine to 30% from 10%. Placer, whose 76%owned subsidiary has a 30% stake in Porgera, lost 37 cents to $13.63.

Standing out in the crowd was Richmont Mines, which closed at a new 52-week high of $1.50 for a gain of 20 cents. The aggressive junior posted earnings of $1.4 million for the nine months ended Sept. 30 and expects to produce 32,000 oz. gold at its Francoeur mine in 1993.

Today, Caledonia Mining sold its 1.3 million shares of Richmont for net proceeds of $1.5 million. Caledonia closed down a penny at 27 cents. More than doubling to 55 cents, NovaGold Resources has signed a deal with Arimetco and Breakwater Resources that will see copper ore from NovaGold’s Murray Brook mine in New Brunswick processed at the nearby Caribou mill. Arimetco, which has subscribed for $500,000 worth of NovaGold shares and an equal number of warrants, closed unchanged at $3.25.

After hitting $24 early in the report period, shares of Asbestos Corp. plummeted to $17 on the Montreal Exchange. Quebec says it will try to appeal an Ontario court decision to grant a hearing into the treatment of minority shareholders during the Asbestos takeover.

Meanwhile, Asbestos Corp.’s new owner, Mazarin, has been accorded senior status on the Montreal Exchange. Mazarin added 10 cents to 79 cents. Also in Montreal, newly formed Novicourt, which holds 45% interest in the Louvicourt base metal project, was listed on the exchange at $3.25. Novicourt was created when Louvem Mines was restructured into two distinct companies. Louvem, which retains 21 exploration properties in northwestern Quebec, lost $3 to close at 20 cents.

Shares of CDN-listed White Star Copper Mines were notably active today, trading at over $1 on speculation that news may be emerging from the company’s Timmins-area property.

Heavy trading continued to fuel the diamond stocks, with Lytton Minerals gaining 4 cents to $1.15 and United Reef Petroleums adding 16 cents to 48 cents. As $4.2 million worth of shares changed hands, Dia Met Minerals shed 13 cents to $32.13.