STOCK MARKETS — Golds, metals add momentum to TSE

Golds and base metals continued to lead the charge as the Toronto Stock exchange smashed previous records and gained 123.73 points (2.5%) for the report period ended Jan. 30. The TSE 300 composite index closed at 4,987.87, setting new records on each of the five consecutive trading days.

At the close on Jan. 30, the Canadian dollar was trading at US72.60 cents, down 0.86 cents from a week before. The Bank of Canada’s base rate had fallen 37 basis points to 5.37% at the Tuesday Treasury bill auction, causing the commercial prime rate to tumble by 25 basis points to 7.25%.

Gold continues to trade above the US$400-per-oz. mark, and the Jan. 31 morning fix was relatively unchanged at US$403.20 per oz., up 20 cents from the previous week. Platinum was off $3.25 to US$418.25 per oz., and silver shed 2 cents to US$5.54 per oz.

The TSE gold and precious metals sub-index rose in concert with the gold price, hitting a record 12,227.31 on Jan. 29. The sub-index eased slightly, later in the week, but still managed to gain more than 180 points (or 1.5%) to close at 12,005.96.

All the precious metals stocks were active, with TVX Gold continuing to be the most actively traded issue for the second week running. TVX was up 50 cents to $13.12 on a weekly volume of 7.5

million shares. Barrick Gold was the second-largest volume trader in the senior golds, with more than 5.5 million shares changing hands. The company announced it will proceed with the development of a US$300-million Pascua open-pit mine at its Nevada project in Chile. The mine, which is expected to begin operations in 1998, will produce between 300,000 and 400,00 oz. at a cash operating cost of about US$200 per oz. Barrick shares added 25 cents to close at $40.62.

Other actively traded gold producers included: Placer Dome, up 37 cents to $38.37; Echo Bay Mines, adding 75 cents to $16.88; Kinross Gold up 25 cents to $12.62; and Cambior, jumping $1.25 to $19.

Base metal prices on the London Metal Exchange were all stronger, with nickel leading the way, rising 16 cents to close at US$3.84 per lb. on Jan. 31. After losing ground over the past few weeks, copper rebounded, adding 2 cents to close at US$1.17 per lb. Lead rose by 1 cents to end at US34 cents per lb., and zinc posted a similar gain of 1 cents to end at US48 cents per lb.

The base metals miners also continued to rise, with the mines and metals sub-index closing on Jan. 30 at 5,232.73, up more than 315 points (or 4.9% from the previous Tuesday.

Nickel giant Inco was the most actively traded miner, surging ahead on predictions by analysts that nickel demand would exceed supply. Shares of the company jumped $3 to close at $49. Other nickel issues also fared well, posting solid gains based on improving fundamentals. Falconbridge rose 75 cents to $30.25; Sherritt was 62 cents higher at $17.62; and Diamond Fields Resources rose by $1 to $29.

The rise in the price of uranium was linked with the performance of two other metals producers. Cameco vaulted $10.12 to end the week at $68.50. Rio Algom, a past producer of the commodity, announced it intends to develop the 60 million lb. of uranium resources at Smith Ranch project using in situ leaching. Rio shares moved $1.37 to end at $25.

The market appears to have had an inkling of the proposed deal between South African-based Gencor, Eldorado Resources and Vancouver-listed HRC Development. The deal will give Eldorado a Brazilian gold mine, exploration projects in North America, Turkey and Brazil, and rights to Gencor’s proprietary bacterial oxidation technology — all in exchange for shares. Eldorado shares added 37 cents to close at $5.37.

Bema Gold had a good week, gaining more than 55 cents to $3.90. More than 4.9 million shares traded following news that the Refugio gold mine in Chile is up and running, with the first dore bar expected in February.