STOCK MARKETS — Flat gold price, weak dollar limit TSE

A stagnant gold price, coupled with continuing weakness in the price of the Canadian dollar, limited the Toronto Stock Exchange to a small gain over the 5-day report period ended Jan. 10. The composite 300 index added 5.99 points to close at 4,191.86.

The spectre of the Mexican peso crisis contributed to gold’s flatness over the period, with the London afternoon fix on Jan. 11 set at US$375.60 per oz., unchanged from a week ago.

Renewed fears over Quebec separation and the ongoing Mexican monetary problems continued to pummel the Canadian dollar. It hit a new 9-year low of US70.7 cents before closing at US70.9 cents on Jan. 10.

In an attempt to prop up the sagging dollar, the Bank of Canada rate was set at 7.24%, up 12 basis points on the week. In the weeks ahead, analysts expect the prime rate will increase to 8.5% from its current 8%.

The TSE announced that it was dropping 23 companies from the benchmark 300-stock composite index. Included in the list were Campbell Resources and Golden Knight Resources, which are being removed because they no longer meet the exchange’s requirements for trading volume or liquidity. To help fill the void, four other mining issues will be added to the list. These include Falconbridge, Goldcorp, International Musto Exploration and Miramar Mining. Campbell lost 4 cents to 82 cents; Golden Knight fell 88 cents to $6.88; Falconbridge added 88 cents to close at $25.25; Goldcorp dropped 38 cents to $7.38; and International Musto fell 13 cents to $6.53.

Senior gold producers all lost ground on the week, with Echo Bay Mines losing 63 cents to $13.75, Hemlo Gold Mines dropping 50 cents to $13.38, and Placer Dome (the big loser) slipping $1 to $28.25.

With the recent slide in gold prices, speculation is growing that American Barrick Resources may be forced to sell, on an individual rather than a collective basis, the four gold mines acquired from Lac Minerals. The mines, which were put up for sale in October, were expected to fetch more than US$300 million as part of a package deal. The transaction was supposed to close by Christmas, but as yet there have been no announcements, and it is rumored that Kinross Gold has dropped out of the bidding. American Barrick finished the week at $29.63, down 63 cents, while Kinross lost 25 cents to $6.75.

Adex Mining bounced into the spotlight this week by announcing that it had entered into an agreement with Piskahegan Resources, a private company which owns the Mount Pleasant mine in New Brunswick. Adex can earn up to a 10% interest in Piskahegan by funding a $525,000 exploration and metallurgical research. Adex also has the option of acquiring a total interest of 50.1% in Piskahegan. The mine hosts 55 million tonnes of reserves containing appreciable amounts of tin, tungsten, molybdenum, zinc, copper and bismuth in nine separate deposits. Adex closed up 7 cents to 24 cents.

Montreal-listed Espalau Mining has signed a letter of intent with Vancouver-listed Minorca Resources concerning an interest in the Bachelor Lake gold mine and in the contract mining firm Ross-Finlay. Espalau will sell 30% of the shares in Ross-Finlay for an interest-bearing, $2-million convertible debenture from Minorca. Espalau will also sell a 50% participating interest in the Bachelor Lake mine for $4.5 million. Espalau shares added 10 cents to end at 85 cents.

Several companies active near Murgor’s gold discovery in northern Quebec were heavily traded and posted minor losses on the week. More than 1.5 million shares of Orient Resources changed hands as the stock edged downward 1 cents to close at 23 cents. Shares of Freewest Resources also lost ground, dropping 12 cents to close at 70 cents. Two other companies which recently entered into deals for property in the area ended the week mixed. GeoNova Explorations was off 2 cents to close at 35 cents, while Wiscan Resources bucked the trend jumping 9 cents to end at 26 cents.