STOCK MARKETS — Golds keep lifting TSE higher and higher

Gold and energy stocks drew the Toronto Stock Exchange upward through the first four days of the report period ended Jan. 9, culminating with a record high on Jan 8. But weakness in technology stocks and in the New York market brought the market down 42.91 points on Jan. 9, as a near-record number of shares changed hands. In the end, the TSE 300 composite index was 44.63 points (or 0.9% higher) than a week before, closing Jan. 9 at 4,812.45.

The Canadian dollar was lower against the major foreign currencies and, by noon on Jan. 10, was trading at US73.28 cents. The Central Bank rate, set at 5.73% on Jan. 3, was bumped to 5.78% at the Bank of Canada auction on Tuesday. The prime rate remained at 7.5%.

Gold touched the US$400-per-oz. mark on London bullion markets, reaching US$396.75 per oz. on the morning of Jan. 10 — an increase of $6.25 from the week before, and US$400 in the afternoon. Platinum, up $9.85 to US$415.85 per oz., recovered much of its lost ground, and silver, up 19 cents to US$5.54 per oz., was also higher.

The TSE gold and precious metals sub-index was up 7.2% on the week, closing at 11,583.47 points on Jan. 10 for a rise of 782.35. Indeed, gold stocks rose across the board. The most actively traded was TVX Gold, up $1.25 to $11.25 on a volume of more than 10 million shares. Barrick Gold added $2.50 to $39.62 and Placer Dome $2.25 to $36.88. Cambior announced that the commission investigating the Omai mine cyanide spill had recommended that the Guyanese government allow production to resume. The issue rose $1.12 to $16.50.

London Metal Exchange prices for the base metals were mixed, with nickel up 8 cents to US$3.42 per lb. and copper down 7 cents to US$1.18 per lb. Zinc and lead were both steady. Toronto base metal stocks were weaker after the Jan. 9 market selloff, with the TSE mines and minerals sub-index finishing the report period at 4,820.54, down 124.37 points or 2.5%.

Inco was off $1.75 to $43.75; Noranda lost 88 cents to $27.12; and Rio Algom dropped 62 cents to $24.75. Falconbridge was 25 cents better at $29.12, while Inmet was down 50 cents to $9.38 as 3.5 million shares traded. Inmet’s performance may be partially attributable to incorrect information that forecast a 21% drop in copper production from the Ok Tedi mine.

Market darlings Cameco and Diamond Fields Resources were both sharply higher, with Cameco up $3.12 to $53.75 and Diamond Fields up $2.62 to $29. Some market letters remain bullish on Diamond Fields’ prospects and suggest a share price of $35 is possible.

The bouyant price of gold, which led to the rally in the senior gold-producing sector, sparked a similar result with the juniors. Several junior producers hit new 52-week highs, while others jumped by leaps and bounds. Among the more notable performers were: Greenstone Resources, jumping 55 cents to $4.45; Campbell Resources, rising 38 cents to $1.75; and Golden Star Resources, vaulting $2.13 to $9.50. Golden Star has told its joint-venture partner, Cambior, that it intends to exercise its option and acquire a half interest in the Gross Rosebel gold project in Suriname.

Peruvian explorer Arequipa Resources posted the largest gain in the junior sector this week, more than doubling and adding $3.38 to close at $5.63. The company is exploring the Pierina gold property in northern Peru. More than 20 samples taken from pits yielded an average value of 0.2 oz. gold and 0.9 oz. silver per ton.

Reports of a newly discovered zone of high-grade gold mineralization at the Ladner Creek project helped Athabaska Gold post a solid 13 cents gain, to end the week at 63 cents. The underground hole, which was drilled to test the down-plunge projection of previously mined ore zones, cut 0.33 oz. gold per ton over 29.5 ft.

Among other junior issues, TVI Pacific saw 3.8 million shares traded; it rose 19 cents to $2.57 on continued encouragement from its Philippine properties. Goldstake Resources also traded heavily, and was down 6 cents to $1.45. And Nelson Gold, which is exploring in Russia, was up 48 cents to $2.60 in active trading.