STOCK MARKETS — Bullion holds steady as gold equities slip

Gold bullion prices changed little over the week, slipping a meagre US20 cents to US$376.25 per oz. However, investors caught a case of the jitters as gold continued trading in a narrow range. Most of the gold equities drifted lower, while the Toronto Stock Exchange gold and silver index hit a high of 11,660.65 points before declining to 7,858.04.

American Barrick was off $1.75 to $31.88; Placer Dome shed $1.75 to close at $30.50; Echo Bay lost $1.38 to end the week at $15.88; Agnico Eagle was off 50 cents to $15.13; Franco Nevada lost $2.50 to close at $79; and Euro Nevada slipped $1.50 to $41.

Royal Oak Mines reported net income of $15.6 million for the year ended Dec. 31, 1993, an increase of about $4 million from the previous year’s results. Royal Oak closed down 25 cents to $5.50.

The company also reported that the re-opening of the Colomac mine in the Northwest Territories is continuing on schedule. All equipment and supplies required for this year have been trucked in via the winter road. Royal Oak estimates Colomac will produce 70,000 oz. this year (with the first pour planned for mid-May) and 170,000 oz. in 1995.

Cambior, meanwhile, has won a bid to acquire Peru’s La Granja property, which has a drill-indicated resource of 175 million tonnes of “minable ore.” Surprisingly, this is not a gold project, but a copper play amenable to solvent extraction-electrowinning. Says the pure gold producer: “(This acquisition) is in keeping with our policy of moderate and managed diversification.” Cambior closed down 25 cents at $20.75.

Another basically pure gold miner, Placer Dome, is teaming up with Texas Star Resources to explore the Crater of Diamonds state park in Arkansas. Texas Star gained 35 cents over the week to close at $3.90.

While it’s bad news for employees, the fact that Inco will lay off another 1,000 workers turned investors bullish. The nickel giant closed up $1.50 at $33.75.

Another base-metal heavyweight, Cominco, reported that the British Columbia government had finally settled outstanding issues with regard to its Trail smelter (see full report on page 1). Cominco shares closed up $1 at $20.63. To reduce expenses, Amax Gold has eliminated the dividend on common shares. It closed up 63 cents on the news. Amax also secured a commitment for a $100-million line of credit.

Kinross Gold, which continues to report interesting results from its Hoyle Pond property near Timmins, Ont., rose a bullish 65 cents to close at $4.95, a 52-week high.

Orvana Minerals has increased its interest in the original Altiplano joint venture in Bolivia and, beyond acquiring a bigger percentage, it and its partners have added the southern Altiplano and Eastern Cordillera areas. Exploration will begin immediately, Orvana said in a press release. The company closed up 63 cents at $6.38.

X-Cal Resources recently bolstered its financial position by adding $950,000 to its coffers through a private placement in Europe. X-Cal now has $1.4 million in working capital and will focus efforts on its five gold projects in Nevada. X-Cal was off 6 cents to 84 cents.

Montana-based American Gem (TSE) gained ground this week, adding 63 cents to close at $4.75. The company, which reached a 52-week high of $5.13 over our report period, has outlined two alluvial sapphire deposits. A sophisticated heat-treating process is being used, which has the effect of improving the color and clarity of the stones. Production will start later this year. Gold-explorer Athabasca Gold jumped 21 cents to close at $1.36. Weekly volume exceeded 1.5 millon shares. The company and its partners are drilling an iron formation target at the Damoti Lake project near Yellowknife, N.W.T. At presstime, a news release from Great Lakes Minerals announced that Hecla Mining, the project manager, had drilled several high-grade intercepts along strike of previously known high-grade gold mineralization at the Grouse Creek mine in Idaho. The intersections range from 0.384 oz. gold per ton across 10 ft. to 3.32 oz. across 25 ft. In-fill drilling also cut values, from 0.205 oz. to 0.673 oz.