STOCK MARKETS — Currency crisis adds a chill to the TSE

A lack of investor confidence in the U.S. dollar rattled Canadian currency markets, which led the Toronto Stock Exchange to post a small loss during the 5-day report period ended March 7. The composite 300 index fell 2.29 points to close at 4,122.52.

In response to the falling U.S. dollar, the Canadian loonie plummeted to US70.7 cents, a drop of 1.25 cents on the week. This led the Bank of Canada to boost the bank rate by 58 basis points to 8.6%, triggering a 50-basis-point rise in the prime rate to 9.75%.

Currency fears drove up gold bullion prices, with the London afternoon fix on March 8 set at US$380 per oz., an increase of US$4.30. The rising bullion price spilled over to gold stocks, which caused the gold and precious metals subgroup to rocket up 607.8 points to 9523.7.

Senior gold producers were all higher on the week, with Echo Bay Mines gaining $1.25 to $14; Hemlo Gold Mines tacking on 88 cents to $12.88; and Placer Dome adding $2.25 to close at $30.75.

Barrick Gold was the big gainer on the week, moving up $2.63 to $32.88. The company announced it had completed more than 6,300 ft. of drilling on Moneta Porcupine Mines’ Michaud claims near Timmins, Ont. Highlights from the program include 0.23 oz. gold per ton over 16.4 ft. in hole 95-152 and 0.17 oz. gold over 29.5 ft. in 95-153. Drilling is continuing, with two rigs on site. Moneta shares gained 4 cents to close at 41 cents on a volume of 693,700 shares.

Exploration of the Michaud claims is an example of Barrick’s renewed efforts in Canada. Earlier this week in Toronto, Barrick President Robert Smith told delegates of the annual convention of the Prospectors and Developers Association of Canada that his company plans to spend $75 million on capital projects in this country in 1995.

Meanwhile, near Timmins, significant gold mineralization was intersected in a hole drilled near the western boundary of Kinross Gold’s Bell Creek mine property. The hole contained several intersections at vertical depths between 980 and 1,165 ft., with the best zone containing 0.86 oz. over 9.5 ft. Apparently, the mineralization is unrelated to the lower-grade production horizons previously mined at Bell Creek. Followup drilling is planned on the adjoining ground, which belongs to Kinross’s affiliate, Alberta-listed Pentland Firth Ventures. Kinross tacked on 50 cents to close at $6.50. River Gold Mines has signed a deal to lease the 200,000-tonne-per-year Magnacon mill, near Wawa, Ont., from the Magnacon joint venture. The Magnacon partnership includes Muscocho Explorations, Flanagan McAdam Resources and Windara Minerals. River Gold intends to process ore from its nearby Eagle River gold mine and anticipates initial annual production of 100,000 tonnes, which will yield about 40,000 oz. per annum. River Gold and Muscocho each lost 1 cents to close at $1.80 and 23 cents, respectively, while Flanagan McAdam had a high of 8 cents and a low of 6 cents.

Toronto-based TVX Gold bought the assets of a Greek mining company, Kassandra Mines, with a bid of US$47 million. Assets include three mines which, according to TVX’s due diligence report, hold reserves of 15.4 million tons averaging 3% lead and 4% zinc, plus 0.03 oz. gold and 2.92 oz. silver per ton. The property hosts additional reserves in a stockpile of sulphide ore and within the mine tailings. TVX will spend US$180 million to modify the existing plant and to construct a new gold-processing plant. Shares of the intermediate-sized producer closed at $9.75, up 63 cents.

At the San Andres project in Honduras, Greenstone Resources has completed 2,500 metres of drilling and increased the property’s gold resource to 1 million oz. The company will complete a feasibility study during the next 12 months, and, if results prove positive, startup could occur in 1997. Greenstone shares added 15 cents to close at $1.60.

Junior Freewest Resources has signed a letter of intent with Metall Mining concerning 86 claims controlled by the latter, southeast of the Lac Shortt mine in northwestern Quebec. Freewest can earn a half interest in the ground, which hosts two gold deposits, by spending $500,000 on exploration during the next three years. Meanwhile, on its Barry Twp. property, Freewest has started line-cutting and geophysical surveys. The company’s shares dropped 6 cents to close at 74 cents.