STOCK MARKETS — Gold stocks gain ground in steady market

The Toronto Stock Exchange was fractionally higher over the trading period Feb. 19-25, as the gold stocks staged a strong recovery. The TSE 300 composite index closed at 6,247.78 on Feb. 25, up 9.56 points, setting a record high of 6,260.73 during trading on Feb. 19. Trading was heavy, with a record volume of 169 million shares across the table on Feb. 20.

The Canadian dollar changed little against the U.S. dollar, falling a quarter of a cent to US73.21 cents. The other major foreign currencies gained back some ground against both dollars, with the beleaguered Japanese yen leading the recovery.

Precious metal prices showed strong gains last week, partly influenced by the recovery of the European currencies and partly spurred by the death of Chinese leader Deng Xiaoping. Gold was up $7.75 to US$353.85 per oz. at the London morning fix on Feb. 26, and silver added 3 cents to finish at US$5.23 per oz.

The real story in the precious metals belonged to the platinum group, as the threat of a March 15 strike at the Nor’ilsk nickel-mining complex in northern Russia gave rise to fears of shortages of platinum group metals. Platinum was fixed at US$377 per oz. on the morning of Feb. 26, and was even higher by presstime, trading at US$383.50 in the afternoon session in London. Palladium was up to US$141.25 per oz. and had hit US$148 by the afternoon session. The base metal markets were steady, with nickel adding 5 cents to finish at US$3.54 per lb., and copper and lead both unchanged. Zinc lost 2 cents to finish at US53 cents per lb.

The gold stocks rebounded a full 5% on the week’s price strength, with the TSE gold and precious minerals sub-group closing 548.58 points higher at 11,397.45. The metals and minerals sub-group also outpaced the market, though not as strongly as the golds; the base metal index added 119.02 points for a close of 5,605.81.

With the Busang deal now done, but several details regarding Bre-X Minerals’ right to sell its share unresolved, the company’s share price continued to fall last week. The issue lost a full dollar, dropping to $19.80 with 25 million shares changing hands. Montreal-listed Bresea Resources, which owns 23% of Bre-X, lost 60 cents, to close at $10.35, on a volume of 6.2 million shares.

Coleraine Mining Resources recently found three zones of gold mineralization on the Perron property in northwestern Quebec. Investors were clearly disappointed with the project, however, as revealed by a 36% drop in the stock’s value. The issue lost 27 cents, hitting 47 cents on an extraordinary trading volume of 10.1 million shares.

Coleraine is earning a half interest in the property from Falconbridge, which saw its share price rise this week, up $1.50 to $31.90 with almost $8.5 million worth of shares changing hands.

Guyanor Ressources lost 41% of its stock value this week, after it became clear that partner BHP plans to quit funding the Dachine diamond project in French Guiana in the wake of poor recoveries from a bulk sample. The issue shed $3.90 to close at $5.70.

Bema Gold gained $1.90 on the week, closing at $11.25, after news of a potentially large gold discovery on the Quebrada property in northern Chile.

Six holes intersected a well-mineralized porphyry cut by a wide zone of higher-grade sheeted veins.

Teddy Bear Valley Mines jumped 70 cents, to $2.20 over the week. Rumors have begun to circulate regarding the possibility of a takeover by Battle Mountain Gold, with which it shares a Timmins-area gold project.

Greenstone Resources, currently the largest gold producer in Central America, was up $1.65 at $16.15 over the report period. The company’s recent exploration work is adding to the potential of the Cerro Mojon deposit at La Libertad, a Nicaraguan mine about to pour its first gold.