STOCK MARKETS — Gold stocks take breather as bullion price

Most of the gold stocks on the TSE were listless or falling slightly, probably because bullion itself shed a couple of dollars to US$373.70 per oz. over our report week. But in the equities there were exceptions to the sideways drift. American Barrick and its fellow travellers, Franco Nevada and Euro Nevada, kept up their blistering upward pace. Barrick gained just a shade over $3 to close at $38.75, while Franco was up another $3.50 at $85.50 and Euro climbed to $44.75, up $2.75. The latter company recently issued 1.5-million units priced at $38. Each unit, in hindsight clearly a bargain, converts into a common share and a warrant exercisable at $100 per share over the next five years. Euro’s coffers swelled by an additional $57 million from the issue.

From the rumor mill (and duly reported in the business press) came word that Lac was in merger talks with Cyprus Minerals. A Lac spokesman would not comment on the rumor. Lac closed down 25 cents at $10.38.

On the base metal side, the Canadian Bond Rating Service cast a critical eye on Noranda’s debt and declared it somewhat less attractive than previously. The ratings were cranked down a notch on the company’s preferred shares and debt. Noranda closed up, nevertheless, gaining nearly a dollar to close our report week at $23.88.

Last week, Inco held its annual meeting with analysts and the media. While media reports focused on writeoffs occasioned by production cutbacks, analysts took something positive from it, for the stock rose nearly $3 on the two trading days following the meeting. By the end of our report week, it was up slightly more than $2 at $30.88.

Atlanta Gold popped 41 cents to close at $1.75. This week, it cut a deal with Consolidated Ramrod on the Elmore property near Boise, Idaho (details on Page 6). Ramrod itself had a decent week, rising 63 cents to close at $7.63. Ramrod and Atlanta are linked in that they share corporate headquarters and several senior executives.

BYG Natural Resources suffered a setback when Gestion SRC backed off a deal to put the Mt. Nansen gold-silver project into production. Metallurgical difficulties were cited. BYG closed down 2 cents at 18 cents. Cathedral Gold gained ground on news from its Guyana play. Trenching on the Kaburi-Eldorado project revealed good widths (from 16 to 64 ft.) and good grades (as low as 0.03 to 0.83 oz. per ton). Cathedral closed up 27 cents at $1.88.

Jordex Resources reported that one private placement announced late last month will not proceed. However, it lined up another private placement of $250,000 (500,000 shares at 50 cents apiece). The funds will be added to working capital. Jordex closed at 99 cents, up 39 cents. More than 500,000 shares changed hands.

Denison Mines preferred shares (both series) gained 70 cents each, closing at $4.70 (9.5% preferreds) and $4.65 (9.75% preferreds). Both sides (Denison and Ontario Hydro) in a $400-million arbitration case will sum up their cases Dec. 10 before the arbitration panel.

Queenston volume rose above the weekly norm for this stock. Nearly half a million shares changed hands. Queenston closed up 14 cents at 90 cents. The company has a significant portfolio of properties in and around Kirkland Lake. Scintilore, which is involved in a lawsuit against the original Hemlo stakers, was another heavy trader, rising 60 cents to $3.10 on volume of nearly 700,000 shares.

Also from the rumor mill came word that TVX Gold is peddling its 50% interest in the old Cochenour-Willans mine, a former gold producer near Red Lake, Ont. Said to be nibbling is Placer Dome, which makes sense since its Campbell Red Lake mine is a stone’s throw away. The existing mill, underground workings and a 450,000-ton reserve (roughly 0.50 oz. per ton) make it an interesting proposition. But environmental concerns could be a barrier to any potential sale.