STOCK MARKETS — Base metals catch on in solid market

The TSE metals and minerals sub-index at last caught up with its cousins on the Toronto Stock Exchange over the report period Oct. 16-22. With the TSE 300 composite index sliding into record territory, the base metal miners closed some of the gap that had opened between the mines and other sectors.

The TSE 300, meanwhile, maintained its slow but steady pace, finishing at 5,532.99 for a gain of 52.39 points, or 0.9%, in the five trading days. Daily volumes were heavy, ranging from 85.9 million on Oct. 21 to 105.2 million on Oct. 22.

The Canadian dollar picked up ground against all the major foreign currencies this week, even though the Bank of Canada reduced its overnight loan rate another quarter-point to 3.75% on Oct. 16. At noon on Oct. 23, the Loony was trading at US74.42 cents, up 0.63 cents.

Gold changed little until Oct. 22 when it jumped US$1.40 overnight to US$382.40 per oz. At the Oct. 23 morning fix, dealers settled on US$383.95 per oz. for a gain of $3.15. Platinum also clawed back up the slope, adding $3.75 to finish the report period at US$387.50 per oz. Silver fell 4 cents to US$4.98, while palladium, at US$118.50, seems to have bottomed out.

The gold and precious minerals sub-index missed the wave again, climbing only 45.69 points over the reporting period, to 11,351.83 on Oct. 22. The yellow metal’s inability to break out of its trading range continues to keep gold issues down.

Barrick Gold was the most active issue on the sub-index, rising 35 cents to $36.15 on a volume of 6.2 million shares. Bema Gold was unchanged at $9.50 with 4.8 million shares changing hands; Kinross Gold added 10 cents to close at $10.35; and Placer Dome finished the week at $33.05, up 15 cents.

Most of the large price moves among the golds were downward, and most of them happened among the middle-tier producers. Agnico Eagle fell 65 cents to $19.90, Euro-Nevada Mining was off $2.55 to $36.45, Goldcorp sagged 55 cents to $12.70, Golden Star slid 70 cents to $25.70, and Greenstone Resources closed off 45 cents at $18.05.

TVX Gold rose $1.10 to $10.70 with 5.1 million shares traded. The company, which has been developing the Kassandra gold mine in Greece, has regained full access to the site following negotiations between the Greek government and protesters that were blockading the mine site.

Base metals on the London Metal Exchange were mostly better, thanks to a surge in spot prices on Oct. 23. Nickel was up 5 cents to US$3.21, copper was 2 cents higher at US91 cents, and aluminum added 3 cents to finish at US62 cents. Zinc was virtually unchanged while lead sank like, well, lead, losing 1 cents to meet the Oct. 23 ring at US33 cents per lb.

The metals and minerals sub-index was up 211.30 points to 5,167.67 at the close of trading on Oct. 22, a gain of 4.3% on the week. The sector may have drawn its strength from a widespread feeling that commodity-sensitive industries were poised for a boom, from increased offshore investment, or from a sense that the miners had been overlooked in the bull market of the last three months.

Inco, with 5.4 million shares trading, was the weekly volume leader and rose $2.80 to finish at $42.65 on Oct. 22. Noranda added $2.25 to close at $29.20 while stablemate Falconbridge was $2.20 higher at $29.90. Cominco closed at $31.15, up $2.50, and parent Teck’s B-series shares were up 75 cents to $28.50. Rio Algom saw a $1 gain, closing at $27.65.

The smaller base metal stocks did even better, with Aur Resources up 40 cents at $8.40, International Curator up 55 cents at $12.85, and Westmin Resources up 25 cents at $6.45. Cameco took the only loss on the base metals board, diving $5.65 to close at $61.05 despite posting good third-quarter financial results.

On the junior boards, the week belonged to Franc-Or Resources, which vaulted to $2.90 from $1.20 on trenching results from its Haute-Mana gold project in French Guiana. On the Montreal Exchange, Gaspesie Exploration was 15 cents higher at 50 cents, though it has not released any news.

Bre-X Minerals had another bad week, falling $2.45 to $20.50. Investors are still jittery about the dispute over its Busang property in Indonesia. On Montreal, Bresea Resources was $1.35 lower at $11.65.

Westley Technologies retreated from its gains last week, falling 20 cents to 48 cents.