STOCK MARKETS — Despite drop in price golds hold steady

After a slight 1-day drop, the Toronto Stock Exchange climbed higher over the period ended May 14, with the TSE composite 300 finishing the week at a record 5206.59 for a gain of almost 40 points, or 0.76%. It was the third straight record for the TSE and the 25th so far this year. The TSE 100 was up by more than three points, and closed the period at 314.52.

The Canadian dollar had a quiet week, finishing less than two-tenths of a cent down, to an even 73 cents against the U.S. dollar. It remained nearly unchanged against the value of all major European currencies and the Japanese yen.

Dropping steadily over the period, the London gold fix closed down US$3.05, to US$390.70 per oz. London’s bullion-dealers set their silver price at US$5.363, down almost 10 cents from a week earlier. Platinum started the period steady, then dropped almost US$5 to close at $404.70. Palladium dropped as well, to US$134.50 from US$137.

Having gained 9% in the previous week on the London Metals Exchange, lead steadily dropped during our report period, losing almost half of its recent gains. The spot price for the grey metal was down just 1 cents, to 38 cents.

All other spot metal prices were off as well.

The week saw little change in the gold sub-index of the TSE; it closed down 77.56 points, or 0.6%. Bre-X was, once again, far ahead of the gold pack for the period. It rose $16.30 to close at $215.40. The stock is set to split on May 22, and speculation continues regarding the possible size of the Busang gold project in Indonesia. Bre-X officials are looking to sell 25% of the multi-million-ounce project this year.

Additional gold found by way of subsurface sampling by Arequipa Resources at its Pierina property in Peru lifted that company’s stock by $4 to $23.

Drilling at the property is set to begin shortly, as is an extensive pitting program.

It was another week of heavy trading in the stock of Black Swan Gold with 2.11 million shares changing hands. The share price rose 41 cents, to close at $1.12, as exploration continues at the company’s promising Cata Preta property in Brazil. New, higher assay results for one drill hole were recently released.

Kinross Gold shares were actively traded over the period, although the volume of 4.9 million was just over half of the previous week’s total. The company recently released its quarterly financial statements, which showed a substantial drop in net income.

The TSE mines and metals sub-index fell steadily over the period, although the cumulative drop was just 23.68 points, or 0.4%. Inco lost 60 cents, finishing at $46.45, while Diamond Fields Resources dropped 75 cents to close at $41.90. The shares that traded were valued at $166 million and $171 million, respectively.

The highest percentage rise among junior mining stocks was that of Liberian Iron Ore, which promised to re-enter the international mining business following the acquisition of Botswanan nickel miner Francistown Mining & Explorations (Jersey) and a major interest in a Peruvian copper mine. The company’s shares were up a whopping 330% for the week, to $4.60.

Colony Pacific Explorations saw its stock rise by 128%, to $1.71 following the announcement of its intention to carry out exploration and development in Indonesia with Imperial Metals and Inco. The deal will cover the entire island of Sumatra, with an initial focus on the Kareng and Gedang properties, which are thought to be similar to the huge Grasberg deposit.

Inco has agreed to buy 700,000 units of Colony Pacific at 73 cents per unit, with each unit worth one share and one warrant exercisable at $1.50 until May 31, 1997 and at $2.50 until May 31, 1998.