STOCK MARKETS — Golds shoot skyward as bullion price jumps

The Toronto Stock Exchange continued to set records during the report period period Jan. 31 to Feb. 6, with resource stocks making strong gains. The TSE 300 composite index rang up a 61.6-point (1.2%) gain to post record high closes on four of the five trading days. By Feb. 6, it had reached 5,049.47.

The Canadian dollar slid for much of the week, reaching a low of US72.59 cents on Feb. 5, then bouncing back over the succeeding two days to reach US73.21 cents on Feb. 7. It was strong all week against most of the major European currencies and the Japanese yen. The bank rate moved up fractionally, to 5.39% from 5.37%, at the Feb. 6 Treasury bill auction.

The gold price rose sharply on London bullion markets on Feb. 2, picking up US$7.15 overnight to greet Groundhog Day at US$416.25 per oz. Seeing no shadow, it remained above US$410 for the remainder of the report period, for a morning fix of US$414.75 on Feb. 7 and a net gain of $11.55 on the week. Platinum did better, adding $12.75 for a Feb. 7 fix of US$431 per oz. Silver was whipsawed even higher, picking up 30 cents (roughly 5%) for a Feb. 7 price of $5.82.

The strength on the bullion markets translated into big gains for the gold producers. The TSE gold and precious metals sub-index was up 8.6% on the week, a gain of 1,041.08 points to close Feb. 6 at 13,141.15. The sub-index touched a record 13,177.30 during trading on Feb. 5.

TVX Gold was the most active stock, with 19.6 million shares traded and a gain of $1.75 to close at $14.88. Investment magazine Barron’s tipped TVX, Barrick Gold and Echo Bay Mines, and all three stocks traded heavily. Barrick gained $3.62 to close at $44.25 and Echo Bay was up $2 to $19.62. Other active gold stocks included Bema Gold, up $1.38 to $5.38, Kinross Gold, up $1 to $13.62, and Aber Resources, up $3.12 to $12.88. Cambior and Golden Star Resources announced that their Omai mine in Guyana was back in production; The former added $1.62 to close at $20.62 and the latter was 50 cents higher at $9.88.

Base metal markets were mixed, with nickel falling 4 cents to US$3.80 per lb., copper unchanged at US$1.17 and zinc down 1 cents to US47 cents. Lead continued its modest charge, taking a price of US35 cents per lb. out of the Feb. 7 ring for a 1 cents gain on the week.

Base metal issues gained more modestly than the golds, with the metals and minerals sub-index up 91.37 points to 5,232.73, a gain of 1.7% on the week. Inmet, the most active in the group, saw 6.4 million shares change hands and rose $1.38 to $11.12. Inco was unchanged at $49 in heavy trading and the other big miners gained fractionally, with the exception of Cameco, which added $5.75 to close at $74.25, following the announcement of its 1995 earnings.

The excitement surrounding junior explorers with Cuban interests mainly gripped the Vancouver and Alberta Stock Exchanges but spilled eastward, with Joutel Resources picking up 46 cents to close at 75 cents. The company announced financing arrangements with diversified miner Teck and Montreal-based KWG Resources to continue exploration in Cuba. KWG was off 12 cents to $13.88.

Eldorado announced that South African mining house Gencor was taking a large equity interest in the company. Under the arrangement, Eldorado takes over several Latin American projects from Gencor, including the Sao Bento gold mine in Brazil. Eldorado added $2.50 to close at $7.88 in heavy trading. Another active stock was Peruvian explorer Arequipa Resources, up $2.12 to $9.12.

Tandem Resources announced joint ventures with Bresea Resources and Bre-X Minerals in Indonesia, following a long period of speculation surrounding the stock. Tandem was off 15 cents to $2.15 and stablemate NAR Resources lost 75 cents to close at $1.75. Montreal-listed Sulliden Exploration announced changes to its board of directors and rose 27 cents to 45 cents.