STOCK MARKETS — Golds and base metals help boost TSE above 6,400 — Base metal producers rise despite nickel’s fall

A single day of heavy trading, combined with solid performances by the base metal, gold and precious metal sub-indices, was sufficient to push the Toronto Stock Exchange index to 6,442.54 on May 27 — a gain of 182.40 points.

The broad market neared the mark in the first two days of normal trading but did not surpass it until May 23, when 107.5 million shares crossed the floor. Owing to the U.S. Memorial Day holiday, trading volumes on May 26 were low, with 60.3 million shares changing hands. However, the next day’s trading picked up, when 92.3 million shares crossed the floor.

The Canadian dollar did an about-face from the previous week, losing 89 basis points against its American counterpart. The Loony traded at US72.27 cents at noon on May 28. The dollar also lost ground against the major European currencies but gained some headway against the Japanese yen.

The yellow metal recovered somewhat during the week, with the price fixed at US$344.70 per oz. on the morning of May 28 — an increase of US$2.45. Silver also made a comeback, rising 9 cents to US$4.76 per oz.

Uncertainty surrounding the operations of Russia’s Noril’sk mine boosted the value of platinum to US$404.50 per oz., for an increase of US$8.50.

The price gains of gold and silver sat well with investors, and the TSE gold and precious metals sub-index climbed 154.63 points to close at 9,422.86.

Barrick Gold was up $1.60 to $35.20, whereas Placer Dome gained a nickel to finish at $25.60. With 1996 revenue just shy of $100 million and earnings at an all-Time high, Franco-Nevada Mining added $2.35 to close at $71.70.

Royalty sister Euro-Nevada Mining, however, dropped 95 cents to $40.25 despite record earnings. Among the most actively traded mid-Tier gold producers were William Resources, up 2 cents to $1.20, and Greenstone Resources, which rose 45 cents to $13.05.

Falling nickel prices had no effect on the TSE metal and minerals sub-index, which gained 83.08 points to close at 5,538.77. Nickel dropped 18 cents on the London Metal Exchange, trading at US$3.27 per lb. on the morning of May 28. Lead and zinc broke even, the former trading at US$28c per lb. and the latter at US61 cents per lb. The red metal was down a penny at US$1.17 per lb.

Nor did nickel’s drop affect major base metal producers. Inco was up 50 cents to $45.95 and rival Falconbridge climbed 60 cents to $31.40. The big winner, however, was Rio Algom, which climbed 80 cents to $37.50. Runner-up Noranda gained 45 cents to close at $32.30.

In the junior market, partners Pure Gold Resources and Ashton Mining of Canada continued as the share volume leaders. Pure Gold dropped a penny to 34 cents on a volume of 8.1 million, whereas Ashton Mining shed a dime to close at $4.85 on a volume of 4.3 million shares.

Golden Rule Resources rebounded somewhat from the drubbing it received in the previous week. The issue added a dime to close out the week at $2.85. The company and its Alberta-listed partner, Hixon Gold, got into hot water when independent assay results from the Stenpad property in Ghana returned gold values lower than those previously reported by the companies.

The highest percentage gains went to juniors on the Montreal Exchange. Robex Resources rose 80% to 61 cents, whereas Goths Resources increased 50% to finish at an even buck. Both companies are exploring in Quebec, though Goths holds diamond prospects in Mali as well.

Nelson Gold was down 31 cents to 65 cents, a loss of 32%. The fall followed an announcement that the company will purchase a 70% interest in the Kalana gold mine, in Mali, from Ashanti Goldfields. The purchase would be the first for Nelson beyond the borders of the Commonwealth of Independent States.