STOCK MARKETS — Gold stocks charge ahead as gold tops US$350

Gold stirred from a lengthy slumber during the week ended April 27, gaining more than US$10 to US$350 per oz. in New York and sending gold shares to new 52-week highs on the Toronto Stock Exchange.

The move was attributed to several factors, including jitters over the Russian referendum and currency fluctuations. But the biggest impact on the market, analysts say, was Sir James Goldsmith’s sale of a 10% stake in Newmont Mining to George Soros, a New York-based commodity and currency trader. Goldsmith reportedly used the proceeds to buy US$300 million worth of gold call options.

But some analysts are skeptical about the rally’s sustainability. Usually a rise in the gold price is accompanied by a lot of physical buying, but in this case most of the buying has been on options and futures markets. Richardson Greenshields’ David James, who sees the price dropping back to the US$330 level, says there is still far too much gold above ground (that is, in central banks) to support the dwindling supply/growing demand argument. But, in the meantime, gold shares are responding smartly to the rally. For our report period, the TSE’s gold and silver index surpassed the 7,000 level for a 9% gain on the week. It added another 238 points, or 3%, today (April 28) as gold continued its advance.

Helped by the gold stock rally, the TSE 300 added 28 points for the week and another 19 points today.

American Barrick Resources (TSE), a market favorite, added $2.25 to $25.75 while Placer Dome added $2 to $21.

After a 7-year legal battle, Barrick has agreed to acquire NASDAQ-listed Gold Standard’s interest in the Mercur mine in Utah and settle the litigation in exchange for $4.7 million. Today, Barrick added another $1.13 to $26.88. Gold companies also used the sudden rally to announce new financings. Euro-Nevada Mining, up $1.25 to $24.75, will issue two million special warrants at $25 per warrant while Rayrock Yellowknife Resources, up 75 cents to $13.25, will place 500,000 subordinate voting shares at $12.13 for proceeds of $6 million.

Metalore Resources, awaiting a decision on its appeal of a 1990 ruling that awarded the Brookbank gold property to ASE-listed Ontex Resources, added $1.13 to close at a new 52-week high of $13.88. Although President and major shareholder George Chilian was attending meetings in Thunder Bay, Ont., when The Northern Miner reached his home, the lawyer for Metalore said he suspects a court decision is “imminent.”

Reports of spectacular gold and platinum group values from a prospect in Alberta have raised a few eyebrows in the industry, although apparently not among investors.

Operator Focal Resources has been advancing on the Alberta Stock Exchange of late and two companies who acquired ground adjacent to Focal’s property, Tintina Mines and NSR Resources, both doubled in price during our report period. Tintina added another 2 cents today to 52 cents.

But the Alberta Stock Exchange has requested that Focal have the assays, including 0.4 oz. gold per ton and 0.54 oz. rhodium, checked at a fire assay lab in Canada to confirm their authenticity.

On the diamond front, Pure Gold Resources emerged as a heavily traded winner on news that the junior had arranged a $3.3-million financing with Credit Lyonnais of London. Gaining 6 cents to 81 cents on a volume of 5.3 million, Pure Gold says it will use the funds to finance its diamond exploration activities. It added another 5 cents today.

Up 2 cents to 65 cents, Great Lakes Minerals says it has been issued a water discharge permit for its copper project in Michigan and has arranged debt financing of $500,000. Great Lakes added another 5 cents to 70 cents today. Taking a 24 cents dive to 18 cents was Treminco Resources. A spokesman said the company is trying to raise between $50,000 and $100,000 for exploration on its newly optioned claims along the Yellowknife greenstone belt in the Northwest Territories, where encouraging gold values have been uncovered. Drilling is expected to commence next winter.